Stay or sell: the money side, on sliders.

The facts, in one place.

Six quotable sentences on staying or selling.

1. Staying in a paid-off house is not free: property tax, insurance, and upkeep run two to three percent of its value a year for many homes, and the equity earns nothing you can spend. Selling is not free either: the transaction costs several percent, any gain above the exclusion is taxed, and rent replaces the carrying costs.
2. The fair comparison is over time: what you would have after some years if you kept the house (its equity, less the carrying costs you paid, at what that money could have earned) against what you would have if you sold (the proceeds invested, less the rent you paid).
3. Example: a paid-off $800,000 house costing $20,000 a year to carry and appreciating 3 percent, against selling for $752,000 after costs, investing at 5 percent, and paying $36,000 a year in rent. After ten years, keeping leaves about $810,997 and selling about $749,484.
4. The answer turns on three assumptions more than any other: the appreciation rate on the house, the return on the freed equity, and the rent. Small changes in each swing the result, which is why the tool shows all three.
5. The tax on the sale is often zero: a couple excludes the first five hundred thousand of gain, a single person half that, and the tool applies the exclusion before the gains rate.
6. The number that is not in the arithmetic is the one people decide on: the house is where they live. The tool prices the money side so the other side can be weighed against a figure rather than a fear.

Ten years on.

How the answer moves with one assumption.

How the comparison works.

Keeping a house costs its carrying charges every year and forgoes what the equity could earn, offset by whatever the house appreciates. Selling costs the transaction and any tax on the gain above the exclusion, then rent every year, offset by the return on the proceeds. Neither side is free, and the fair comparison is the position after a chosen run of years: the house's equity net of the carrying costs paid along the way, at what that money could have earned, against the invested proceeds net of the rent paid.

The result turns on three assumptions more than anything else, the appreciation, the return, and the rent, and small changes in each move the lines. That is why the tool is sliders rather than a verdict. The tax on the sale is often nothing, because the exclusion covers most gains, so the money question is the carrying costs and the equity, not the tax; and the question that is not in the arithmetic is the one people decide on.

Methodology.

1. Inputs. The house's value, mortgage, and cost basis; yearly carrying costs; appreciation; rent; the return on freed money; filing status for the exclusion; and the years to compare. Selling costs of 6 percent and a 15 percent gains rate are fixed.
2. Selling. Equity less selling costs less the gains rate on the gain above the § 121 exclusion; then each year the pot earns the return and pays the rent.
3. Keeping. The house appreciates and the equity is value less the fixed mortgage; the carrying costs paid each year are carried as a negative balance at the return, since that money could have been invested.
4. The comparison. The two positions after the years; the year-one costs of each path; and the paths drawn as lines.
5. Validation. The net proceeds and zero gain tax under the joint exclusion in the example; a ten-year path; and a flat case where the two positions differ by exactly the selling costs. A transcription error fails the build.
6. Not modeled. Income tax on the investment returns, mortgage paydown and interest, moving costs, changes in rent or carrying costs beyond the rates, and the non-financial reasons that usually decide it. Hypothetical throughout. Educational, not advice.

Revision history.

The assumption tools' history.

September 7, 2026

Added should you buy points (the bought-down loan against the plain one on the same principal and term, so the position is the interest saved less the cost of the points; true break-even as the first month at or above zero beside the simple rule; the horizon verdict; the return the points earn to the horizon as the monthly-compounded rate at which their cost equals the present value of the saving plus the lower balance owed, by bisection; the largest points count that pays off within the horizon; and the seller-paid case set against the same dollars off the price).

September 7, 2026

Added two mortgage assumption tools: refinance break-even (the simple rule, closing costs over the monthly saving, beside the month-by-month count of interest paid on each loan, where total cost is the balance plus the closing costs plus the interest so far, so the new loan's position is the interest saved less the costs; the reset-the-clock effect flagged when a longer term catches up), and 15-year or 30-year mortgage (the same cash on both paths, the 15-year payment invested after the loan is gone against the difference invested for thirty years, compared at year 15, year 30, and a chosen horizon, with the break-even return by bisection).

September 7, 2026

Added three assumption tools: Roth or traditional 401(k) (the same take-home cost grown at one return and taxed at each end, so the answer turns on the two rates; the plan limit from the annual record), pay off the mortgage or invest (two month-by-month paths, the extra to the mortgage and then the freed payment invested, against the extra invested throughout, with the optional interest deduction), and how much life insurance (the present value of the income to replace as a growing annuity, plus debts, final expenses, and education, less existing coverage and savings, beside the ten-times-income rule).

September 6, 2026

Added two assumption tools: sell or keep the house (carrying costs and appreciation against rent and the return on freed equity, with the home-sale exclusion), and the long-term care cost projection (today's rate at care inflation to the start year, summed over the years of care, with the set-aside today).

September 4, 2026

First release of the longevity projection (year-by-year, spending and outside income indexed to inflation, a fixed return on the remainder, with the sustainable-spending solver) and the pension-versus-lump-sum comparison (the lump sum invested and paying the pension, with the break-even return solver).

Canonical address: https://consideratecapital.com/tools/sell-or-keep-the-house