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Wealth Trajectory

Keep it, sell & rent, or move up?

See how your wealth could grow over the years if you keep your current home, sell it and rent, or sell it and buy a bigger one. You’ll need your home’s value, your mortgage balance and rate, and roughly what you have invested.

  1. Wealth here means equity plus investments

    We add up two things: your (what the home is worth minus what you owe) and your investment accounts. Both grow over time in different ways.

  2. Each choice moves money differently

    Keeping the home pays down the loan and lets the home rise in value (). Selling turns your equity into cash after selling costs. Renting swaps the mortgage payment for rent; moving up puts the cash into a bigger home with a bigger loan.

  3. Compare the gap between paths

    Money tied up in a house can’t also be invested, and the reverse is true too (an ). The difference between paths at the end is the useful number; the totals leave out the rest of your finances.
Your mortgage statement shows your balance, rate, and payments left. The two growth rates are guesses, so try a few values for each. How to read your mortgage statement.
Your current home

What the home would sell for today and what you still owe. Your latest mortgage statement has the loan figures.

$
$
%
Your investments & growth assumptions

Your savings outside the home, plus the growth rates the model assumes. Small changes to the two growth rates move the result the most.

$
$
% / yr
% / yr
yr
Compare keeping with

sell & rent vs. keeping · year 20

−$1,131,533behind if you sell & rent

By year 20: $2,419,559 keeping vs $1,288,026 if you sell & rent. Both count home equity (after growth and loan paydown) plus your investments.

This isn’t a full net-worth statement; it leaves out other properties, retirement savings outside the balance above, and other debts. Those are the same across every path, so compare the gap between scenarios; the total on its own says little.

Keep the house · yr 20

$2,419,559

home equity + investments

Sell & rent · yr 20

$1,288,026

-$1,131,533 vs keeping

Move up · yr 20

$1,690,333

-$729,227 vs keeping

Current home's value · yr 20

$1,314,674

if it grows 4% a year (before subtracting the loan)

What this means

Selling today would leave about $208,000 after 7% selling costs and paying off your loan, and that cash gets invested. Instead of your $2,363 monthly loan payment, you’d pay rent starting near $3,000 a month and rising 3% a year. After 20 years, selling and renting ends up $1,131,533 behind keeping the house.

What drives it: keeping puts more of your wealth in the house, while selling puts more in investments, so the result depends most on the gap between your investment return (7%) and home value growth (4%). Here investments are assumed to grow 3.0 points a year faster.

Property tax, insurance, and maintenance are left out of every path, which flatters owning compared with renting. See the list below for what else isn’t modeled.

Wealth over time (home equity + investments)
Keep the house Sell & rent
$0$483,912$967,824$1,451,736$1,935,647$2,419,559Yr 0Yr 4Yr 8Yr 12Yr 16Yr 20

What this models:

  • Loan paydown each month (: each payment covers interest and pays down some principal)
  • Home value growth at your stated rate
  • Investment growth plus your monthly savings
  • Sale proceeds (after 7% selling costs) go to investments in sell scenarios
  • Move-up assumes proceeds become the down payment on a bigger home (with 3% on the purchase)

What this doesn’t model:

  • at sale. The ($250k single / $500k married filing jointly) covers most primary-home sales, but homes owned a long time or move-up sales can exceed it. Use the capital gains calculator. Tax on investment gains when you eventually sell isn’t modeled either.
  • Mortgage interest deduction. If you itemize, the keep / move-up scenarios get a tax benefit not credited here. Use the mortgage interest deduction calculator.
  • Property taxes & insurance. Left out of every scenario, which flatters keep / move-up versus sell & rent (a renter doesn’t pay them). In move-up, property tax can spike when the new home is reassessed (CA Prop 13 reset, FL Save Our Homes loss, etc.). Can be a multi-thousand-dollar annual hit not reflected here.
  • Maintenance and major repairs (typically 1-2% of the home’s value a year), which means the model understates the cost of owning in keep / move-up scenarios.
  • Market ups and downs (sequence-of-returns risk): the model grows investments smoothly, but real markets are lumpy, and a downturn at the wrong time hurts more.
  • Rent growth is assumed at 3%/yr; reality varies widely by market and period. National asking rents jumped by double digits in 2021 into early 2022, then cooled to roughly flat-to-4%/yr in 2023-2024 depending on the index.
  • Closing-cost frictions on the move-up. 3% closing on the new home is modeled, but agent commission on the sale is bundled into the 7% selling cost, not credited separately.

Results are estimates based on your inputs and the assumptions on this page, not quotes or advice. A lender, servicer, or tax advisor will give you different numbers. Disclaimer

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Terms used on this page

Each path above trades home equity for investments, or the reverse. These are the terms the comparison uses.

Home equity
What your home is worth minus what you still owe on it. A $600,000 home with a $350,000 mortgage has $250,000 of equity.
Appreciation
The rise in a home’s value over time. The long-run US average is roughly 3% to 4% a year before inflation, but it varies a lot by market and isn’t guaranteed.
Investment return
How much your investments grow each year on average. This page uses a nominal return (before inflation) so it compares fairly with home growth and mortgage rates.
Amortization
How a mortgage is paid off over time. Each monthly payment covers that month’s interest, and the rest pays down the balance, so equity builds faster in later years.
Selling costs
What it costs to sell a home, mainly agent commissions plus transfer taxes and fees. This page assumes 7% of the sale price.
Opportunity cost
What your money could have earned if used another way. Equity tied up in a house can’t also be invested, which is why this page compares paths side by side.
Capital gains tax
Tax on the profit when you sell something for more than you paid. It isn’t included in this model.
Section 121 exclusion
A tax rule that lets you skip capital gains tax on up to $250,000 of profit from selling your main home ($500,000 if married filing jointly), if you’ve owned and lived in it 2 of the last 5 years. More

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