About the Down Payment Opportunity Cost Calculator
What is the Down Payment Opportunity Cost Calculator?
The down payment is often the largest single cheque a family writes. Its opportunity cost is what that money could have earned if invested in mutual funds or deposits instead.
This calculator compounds the down payment at your expected investment return and at the home's expected price growth, and shows the gap between them.
How to use the Down Payment Opportunity Cost Calculator
- Down Payment + Purchase Costs (₹) (sample: 20,00,000)
- Return if Invested Instead (% per year) (sample: 10)
- Years (sample: 15)
- Home Price Growth (% per year, on the down-payment share) (sample: 6)
- Press Calculate Opportunity Cost (results also refresh as you type). The result card shows the Down Payment Could Grow To, along with Same money growing with the home price, Opportunity cost and Note.
Formula used
Invested value = D × (1 + r)ⁿ; In-home value = D × (1 + g)ⁿ; Opportunity cost = difference
- D = down payment plus purchase costs
- r, g = investment return and home price growth
Buying also saves rent and builds equity through EMIs, which this simple comparison does not include.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Down Payment + Purchase Costs (₹) | 20,00,000 |
| Return if Invested Instead (% per year) | 10 |
| Years | 15 |
| Home Price Growth (% per year, on the down-payment share) | 6 |
| Result | Value |
|---|---|
| Down Payment Could Grow To | ₹83,54,496 |
| Same money growing with the home price | ₹47,93,116 |
| Opportunity cost | ₹35,61,380 |
| Note | Buying also saves rent and builds equity through EMIs – use the Buy vs Rent Break-Even Calculator for the full picture |
Tips for using the Down Payment Opportunity Cost Calculator
- Stamp duty and registration are sunk costs that never appreciate, so include them in the down payment amount.
- A smaller down payment keeps more money invested but raises the loan and the interest cost.