The Guide · v2.6 · Updated Apr 2026

How it
works

Stockstead compares three ways to fund a home. This page is the user manual — what each scenario actually computes, where the tax assumptions come from, and how to read the chart the calculator hands you back.
APure cashBLiquidateCSBLOC①Reading results②The fine print
AScenario A — Pure cash

Pay from cash. Leave the portfolio alone.

The simplest: you already have the money sitting in a checking or savings account, and you close without touching investments. No capital gains. No new debt. Your portfolio keeps compounding on its own timeline.

The cost is what that cash could have earned. If it was headed for a money market at 4.5% and nothing else changes, that’s the opportunity cost we’ll bake in.

Good fit when
You already parked liquidity for exactly this reason.
Skip it if
You’re reaching for a HELOC to call it “cash.” That’s scenario C in a costume.
Figure 1.0 — flow of dollars
cost_a = opportunity(cash × r, t)
BScenario B — Liquidate

Sell shares. Pay the tax. Close the deal.

You liquidate part of the portfolio to fund the down payment — and possibly the whole purchase. We calculate federal long-term capital gains (0/15/20%), your state’s treatment, and the 3.8% Net Investment Income Tax where it applies.

The lost compounding is the quiet expense. Over 10 years at a 7% expected return, every $100K liquidated is ~$97K of forgone portfolio growth — independent of the tax bill.

Good fit when
Your basis is high (recent buys) or you were going to rebalance anyway.
Skip it if
You’re holding legacy positions with deep gains. That tax bill is a choice, not a fee.
Figure 2.0 — flow of dollars
cost_b = capGains(proceeds) + opportunity(proceeds, t)
CScenario C — SBLOC

Borrow against the portfolio. Don’t sell a share.

A Securities-Backed Line of Credit lets you pledge the portfolio as collateral and draw against it. Your shares stay invested, no capital gains event is triggered, and you’re paying interest instead of taxes.

Rates float (usually prime + 1–2%). Interest generally isn’t deductible the way mortgage interest is. And there’s margin-call risk if your collateral tanks — we model a stress scenario for that.

Good fit when
Deep gains, conviction in the portfolio, and enough cushion to survive a drawdown.
Skip it if
Your portfolio is concentrated in 1–2 volatile positions. That’s a cliff, not a line of credit.
Figure 3.0 — flow of dollars
cost_c = ∫ rate(τ) · balance(τ) dτ // over t years
Worked example

$300K cash down payment, in California

Setup
  • · $1,000,000 taxable portfolio, 50% cost basis ($500K unrealized gain)
  • · $300,000 cash down payment, funded entirely from the portfolio
  • · California resident, top state bracket (13.3% on cap gains as ordinary income)
  • · 7% real expected return on the portfolio (Shiller-historical S&P)
  • · 10-year analysis horizon
Capital gains tax
Realized gain on $300K withdrawal50% × $300K = $150,000
Federal LTCG · 20%$150K × 20% = $30,000
NIIT · 3.8%$150K × 3.8% = $5,700
CA state · 13.3%$150K × 13.3% = $19,950
Total cap-gains tax$55,650 (18.55% of $300K)
Opportunity cost
Compounding factor (10 yr × 7% real)(1.07)¹⁰ − 1 = 0.967
Foregone growth on $300K$300K × 0.967 = ~$290,000
Total cost over 10 years$300K + $55,650 + ~$290K ≈ ~$646K
Verify the math

Every step is hand-checkable. Federal LTCG bracket per IRS Topic 409. NIIT per IRC §1411. California treats long-term capital gains as ordinary income; top bracket 13.3%. Compounding uses (1+r)t with r as the real expected return.

Compare to a 30-year jumbo at 6.5% (~$382K total interest, partially deductible up to the $750K cap) or an SBLOC at 8% (~$240K interest over 10 years, no liquidation, margin-call risk). The calculator runs all three at your inputs.

Run your own inputs
① Reading the chart

Net worth over time. Three lines

A — cash
B — liquidate
C — sbloc
Start points differ
Year 0 shows the immediate hit — taxes paid, cash removed, or debt drawn.
Slopes tell the story
Steeper is better. Slope = portfolio still compounding minus ongoing costs.
Cross-over is real
SBLOC often starts lower and crosses above — that’s the compounding advantage.
② The fine print

What we don’t do

  • —Give you personalized investment advice. Ask a fiduciary.
  • —Model every state’s weird edge cases. We hit the common ones.
  • —Predict future rates. We let you slide them around yourself.
  • —Account for AMT. If you’re in AMT country, talk to your CPA.
Open the calculator Read the FAQ