The Down Payment Trade-Off

The opportunity cost of a down payment isn't a one-time hit — it compounds the whole time your money is locked in the house. Over a shorter horizon, an $80,000 down payment earning a steady 7% would still grow to about $160,000 in ten years.

This doesn't mean renting is always better. It means the true cost of buying includes the growth you gave up by tying up your capital. Almost no one factors this into the rent-vs-buy decision, yet housing is usually your largest expense — so getting it right matters more than cutting any other line in your budget.