Down Payment Opportunity Cost Calculator

Compare a bigger down payment with investing the same dollars at a target return. The math turns on whether your investment return exceeds your mortgage rate (after tax).

Property price

Smaller down %

Bigger down %

Mortgage rate

Investment return

Horizon (years)

Mortgage term (years)

Future value: extra cash invested

$102,549

$47,500 grown at investment rate

Monthly payment savings

$316

bigger down lowers payment

Cumulative payment savings

$37,922

across 10 years

Investing the savings difference

$57,814

if you took bigger down + invested savings

How to read it

Smaller down + invest the difference: extra $47,500 grows to $102,549 at 8.0% return. Bigger down: you save $37,922 in cumulative payments over 10 years.

The investment rate vs mortgage rate spread is the key driver. If markets return more than your mortgage rate (after tax), invest. If returns are uncertain or below mortgage rate, the bigger down payment is the safer bet.

How to Use

Enter property price and the two down payment percentages you're choosing between.
Enter the mortgage rate and your expected investment return.
Enter your time horizon — how long until you'd compare results.
Compare future value of investing the difference vs cumulative payment savings from the bigger down payment.

Frequently Asked Questions

When does investing beat a bigger down payment?

When your after-tax investment return exceeds your mortgage rate. Historic stock returns of 7–10% often beat 6–7% mortgages — but past performance doesn't guarantee anything, and risk-adjusted returns matter.

What about the certainty factor?

Bigger down payment delivers a guaranteed 'return' equal to your mortgage rate. Investing carries market risk. Many investors split the difference: enough down to avoid PMI, the rest invested.

Does the calculator account for taxes?

No — for simplicity. After-tax mortgage rate is lower if you itemize and deduct interest. After-tax investment return depends on account type (taxable, IRA, 401k). Adjust your inputs to match your actual situation.

Should I think about emergency reserves?

Yes — never put down so much that you'd be one job loss away from missing payments. Maintain 6+ months of PITI in liquid reserves before considering any extra down payment.