Run the numbers on selling vs. holding your property. See the real cost of selling — including the rate lock-in effect — and find out if the math supports a move.
Our Analysis
Equity Position
Net Proceeds After Selling
Rate Lock-In Cost
Monthly Payment
It would take 29 months (2.4 years) of higher payments to equal the cost of selling.
Capital Gains Tax
✓ Your gain is fully covered by the $250,000 exclusion
Sell & Rent Scenario
Sell & Rebuy Scenario
What does this mean?
The math is close either way. Your 3.5% rate has value, but you also have $230,000 in equity. Life circumstances — job, family, lifestyle — matter more than the spreadsheet here.
Keep running the numbers
Weighing your options? These tools help you think it through.
Estimate any homeowner's mortgage rate based on when they bought, see the lock-in effect, and find opportunities for assumable mortgage and subject-to deals.
Estimate how much a seller walks away with after commissions, closing costs, and mortgage payoff.
Calculate timelines and reinvestment requirements for a tax-deferred 1031 exchange.
People focus on their home's appreciation and forget the transaction costs. Here's what actually comes out of your equity when you sell:
Agent commissions (5–6%) — On a $450,000 home, that's $27,000. This is the single largest cost of selling.
Closing costs (1–3%) — Title insurance, transfer taxes, attorney fees, and more. Another $11,250.
Moving costs — $2,000–$10,000 depending on distance and volume.
The rate reset — The cost no one talks about. If you bought at 3.5% and rebuy at 6.8%, your monthly payment jumps $1,347/month — that's $16,165/year in additional housing cost.
The math isn't everything. Sometimes selling is the right move regardless:
Life changes — Divorce, job relocation, family growth, or downsizing. Life doesn't wait for perfect market conditions.
Equity harvesting — If you have $230,000 in equity, you could sell and deploy that capital into cash-flowing rental properties via a 1031 exchange, potentially creating $2,000–$5,000/month in passive income.
Market timing — If your market has peaked and you can sell high / buy low in another area, the rate penalty may be worth it.
One powerful option: sell, pocket the equity, rent something affordable, and invest the proceeds.
If you invest your $191,750 in net proceeds at a 7% average return, that's roughly $13,423/year or $1,119/month in investment income.
Combined with the cash flow difference between your mortgage and rent, your net monthly change would be +$719/month.
This strategy works best when: rent is significantly cheaper than owning, you have substantial equity to invest, and you have the discipline to actually invest (not spend) the proceeds.
When you sell your primary residence, you can exclude up to $250,000 in gains (single) or $500,000 (married filing jointly) from capital gains tax.
To qualify, you must have owned and lived in the home for at least 2 of the last 5 years. You've owned for 5 years, so you qualify.
Your gain of $150,000 is fully covered by the exclusion — no tax owed.
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