Zero Down vs. Mortgage
Explore the advantages over a traditional mortgage
Home value:

Zero Down
Mortgage*
Down payment $0 $50,000
Closing costs** $5,000 $40,000
Monthly payment $6,000 $5,099
Monthly taxes & insurance $0 $1,083
Monthly mortgage insurance $0 $490
Total monthly payment $6,000 $6,672
Home equity in 3 / 5 years 3.8% / 6.8% 4% / 8%
Net return in 3 years (at no appreciation)^ $0 -$55,764
Net return in 3 years (at 3% YoY home appreciation)^^ $36,573 $32,644
Net return in 5 years (at 3% YoY home appreciation)^^ $73,989 $129,546
* - We compare against a 5% down 5% fixed-interest-rate 30-year mortgage with a 0.62% Private Mortgage Insurance (PMI)
** - Closing costs is 0.5% of purchase price in the case of Zero Down and assumed to be 4% in the case of mortgage
^ - In the case of sale at no appreciation, a traditional homeowner stands to lose all of their down payment
^^ - The net return takes the upfront down payment and closing costs as well as selling costs into account (6% in the case of mortgage)
Table data is for illustrative purposes only. Actual costs may vary depending on the specific home