House vs Stock Market Calculator
Should you buy a home or invest your down payment? Enter your numbers and see which path builds more wealth.
Quick start — click a scenario or enter your own numbers below:
$80,000
if renting instead
After 10 years (after capital gains tax)
Buying wins by $13,917
Equity vs Portfolio Growth
Mortgage Payment Breakdown
More than half of each payment goes to principal after year 20 (month 233 of 360)
Buy the Home
Rent & Invest
Year-by-Year: Equity vs Portfolio
| Year | Home Value | Mortgage Bal. | Home Equity | Portfolio (after-tax) | Ahead |
|---|---|---|---|---|---|
| 1 | $414,000 | $316,423 | $97,577 | $97,068 | |
| 2 | $428,490 | $312,607 | $115,883 | $114,672 | |
| 3 | $443,487 | $308,535 | $134,952 | $132,843 | |
| 5 | $475,075 | $299,555 | $175,519 | $171,022 | |
| 7 | $508,912 | $289,332 | $219,580 | $211,901 | |
| 10↑ | $564,240 | $271,284 | $292,956 | $279,039 | |
| 15 | $670,140 | $232,189 | $437,950 | $410,244 | |
| 20 | $795,916 | $178,129 | $617,787 | $576,227 | |
| 25 | $945,298 | $103,373 | $841,925 | $790,759 | |
| 30 | $1.12M | paid off | $1.12M | $1.07M |
Portfolio column is after 15% capital gains tax on growth. Home equity has no capital gains tax on primary residence sales up to $250k ($500k married).
Common Questions
Should I buy a house or invest in the stock market?
It depends on your time horizon and local market. In the first 7–12 years, investing the down payment often wins — most mortgage payments are interest, not equity. Over 20–30 years, home appreciation can close the gap. The break-even year shown in this calculator is when buying starts winning for your specific numbers.
Is it a good idea to sell stocks to fund a down payment?
Selling stocks triggers capital gains tax. Long-term gains are taxed at 0%, 15%, or 20%. This tax cost increases the effective price of your down payment. Enable 'Down Payment from Stocks' in Advanced Options to see exactly how much tax you'd owe.
Should I pay off my mortgage early or invest the extra money?
If your mortgage rate (e.g., 6.5%) is below expected market returns (e.g., 8%), investing the extra money wins mathematically. But paying off the mortgage gives a guaranteed, risk-free 'return' equal to your mortgage rate. Enter an extra payment amount in Advanced Options to compare both paths.
What stock market return rate should I use?
The S&P 500 has historically returned about 10% before inflation, or 7–8% after inflation. Use 8% as a balanced default. For pessimistic scenarios try 6%, for optimistic try 10%. The year-by-year table shows how sensitive the result is to this assumption.
What does the break-even year mean?
The break-even year is when your home equity first exceeds what your investment portfolio would have been worth. Before this point, investing is ahead. After it, buying is ahead. For most US markets, this falls between year 10 and year 25.