What if your next home did not come with a mortgage payment? It may sound unlikely, but for many homeowners, it is more realistic than you think.
According to the National Association of Realtors, nearly three out of ten homes purchased today are bought with cash. That share is significantly higher than it was before the pandemic (see graph below).
So how are so many buyers making all cash purchases? The answer is home equity.
In 2020 and 2021, mortgage rates were at historic lows, and the supply of homes for sale was extremely limited. That combination drove home prices up quickly.
If you owned a home during that period, there is a strong chance your property increased in value, possibly enough to help you purchase your next home with cash. As the National Association of Realtors explains:
“Rising home equity has armed many existing homeowners with the financial leverage to make cash offers, allowing them to convert years of price appreciation into immediate purchasing power.”
If you have built substantial equity, this may be a strategy worth considering.
1. Your Offer Becomes More Attractive
Sellers value certainty, and a cash offer removes one of the biggest uncertainties in a real estate transaction: financing approval. As Rocket Mortgage explains:
“Cash offers are attractive to sellers. Sellers often prefer to work with cash buyers because they do not have to worry about a buyer’s financing falling through at the last minute.”
In many markets, presenting an all cash offer can give you a meaningful competitive advantage.
2. You Can Close Faster
Without the need for underwriting, lender approvals, or loan processing, the closing timeline can move much faster. Cotality explains it this way:
“Cash buyers have always enjoyed an edge over borrowers. They remove financing risk, reduce delays, and often close in days rather than weeks.”
If the seller is already under contract on their next home or needs to relocate quickly for a job, that speed can make your offer especially appealing.
3. You Won’t Have Monthly Mortgage Payments
When you purchase a home with cash, you eliminate the need for financing. That means mortgage rates are no longer a factor, and you own the property outright from the day you close. That is a significant advantage.
No mortgage.
No monthly principal and interest payment.
Full ownership from the start.
That level of financial freedom can create meaningful lifestyle flexibility. As Zillow explains:
“Paying in cash means you own your home outright. This eliminates the need for monthly mortgage payments, freeing up your finances for other priorities like savings, travel, or home improvements.”
4. You May Get a Better Deal
Here is another point that surprises many homeowners: cash buyers often pay less for the property.
According to Cotality, buyers who pay in cash tend to spend about 9 percent less than those who finance their purchase with a mortgage. Some sellers are willing to accept a lower offer in exchange for a faster closing, greater certainty, and fewer financing hurdles. As Cotality explains:
“From a seller’s point of view, a lower but reliable offer can feel preferable to a higher one that may collapse weeks later.”
In many markets, that pricing advantage has continued to grow over time (see graph below).
Is an All-Cash Move Realistic for You?
Not every homeowner will purchase their next home entirely with cash, and that is perfectly fine.
The bigger takeaway is this: the equity you have built may open more doors than you realize. Whether that means downsizing and removing a mortgage altogether or relocating with greater negotiating strength, your current home could be the key to making your next move possible.
Bottom Line
Before assuming you will need another traditional mortgage, it is worth asking a simple question: how much equity do you actually have? The answer could reshape what your next move looks like.
If you are curious about what your home equity could make possible, let’s review the numbers together and see how much buying power you may already have. Get in touch with us!
