Downsizing Your Home in CT: Will You Save Money?
Downsizing can be an opportunity to lower your housing expenses, reduce maintenance costs, and put some of your home's equity back in your pocket.
How much could you save? How much cash would you have after the move?
Let's look at a Connecticut homeowner considering a move from a $525,000 house to a $350,000 condo.
How Much Cash Will You Have After Selling?
Our homeowner purchased their house in 2016 for approximately $292,300. They took out a 30-year mortgage at 3.5% interest, with a monthly principal-and-interest payment of approximately $1,050.
After ten years of payments, their remaining mortgage balance is approximately $181,000.
The house is now worth an estimated $525,000.
Here's what the sale could look like:
Selling the house | Amount |
|---|---|
Sale price | $525,000 |
Mortgage payoff | −$181,000 |
Estimated brokerage commission (5%) | −$26,250 |
Estimated seller closing costs (2%) | −$10,500 |
Estimated cash from sale | $307,250 |
The homeowner would have approximately $307,250 available after selling.
The 5% brokerage commission is an estimate. All real estate commissions are negotiable between the seller and the real estate broker.
What Will It Cost to Buy the New Home?
The homeowner has found a condo for $350,000.
They have three choices: make a 20% down payment, make a larger down payment, or pay cash.
20% down | $200,000 down | Pay cash | |
|---|---|---|---|
Purchase price | $350,000 | $350,000 | $350,000 |
Down payment | $70,000 | $200,000 | $350,000 |
New mortgage | $280,000 | $150,000 | $0 |
Estimated buyer closing costs (3%) | $10,500 | $10,500 | $10,500 |
Cash needed to purchase | $80,500 | $210,500 | $360,500 |
Cash from home sale | $307,250 | $307,250 | $307,250 |
Cash remaining or needed | $226,750 remaining | $96,750 remaining | $53,250 additional cash needed |
Buying the condo for cash would require an estimated additional $53,250 ($360,500 − $307,250 = $53,250).
With a 20% down payment, the homeowner would retain approximately $226,750 in cash.
Increasing the down payment to $200,000 would leave approximately $96,750 in cash while reducing the new mortgage to $150,000.
These closing-cost percentages are planning estimates. Brokerage fees are negotiable, and actual costs vary. The estimates exclude mortgage discount points. Other expenses may include moving costs, repairs, and preparing either home for the move.
Want to see what these numbers look like for your home? Use the Downsizing Cost Calculator to estimate how much cash you could have after selling and buying your next home.
Will Your Monthly Housing Expenses Go Down?
Our homeowner currently spends an estimated $2,717 per month on housing.
Let's compare that with the $350,000 condo, using a 30-year mortgage at an assumed 7.5% interest rate.
Monthly expense | Current house | Condo, 20% down | Condo, $200K down | Condo, paid cash |
|---|---|---|---|---|
Mortgage principal and interest | $1,050 | $1,958 | $1,049 | $0 |
Property taxes | $750 | $525 | $525 | $525 |
Insurance | $167 | $75 | $75 | $75 |
Utilities | $350 | $170 | $170 | $170 |
Maintenance | $300 | $90 | $90 | $90 |
Lawn, snow and other services | $100 | $0 | $0 | $0 |
Condo fees | $0 | $350 | $350 | $350 |
Total per month | $2,717 | $3,168 | $2,259 | $1,210 |
Change from current house | — | +$451 | −$458 | −$1,507 |
These are hypothetical expenses. The current home's insurance is estimated at $2,000 annually, property taxes at $9,000 annually, and utilities at $350 per month. The new mortgage payments assume a 30-year fixed loan at 7.5%, using the rate reported by Mortgage News Daily on October 9, 2026. Payments are rounded to the nearest dollar.
With a 20% down payment, the homeowner would keep approximately $226,750 in cash, but monthly housing expenses would increase by $451.
With a $200,000 down payment, monthly housing expenses would decrease by approximately $458, and the homeowner would retain nearly $97,000 in cash.
Paying cash would lower monthly expenses by approximately $1,507, but the homeowner would need an additional $53,250 to complete the purchase.
The size of the down payment makes a substantial difference in both monthly expenses and how much cash remains available after the move.
Mortgage rates matter, too. Our homeowner has a 3.5% mortgage on their current house. Financing the condo at 7.5% can create a higher monthly mortgage payment, even though the new home costs considerably less.
A Cheaper Condo May Cost More Each Month
Let's compare two condos with different purchase prices, property taxes, and association fees.
Condo A | Condo B | |
|---|---|---|
Purchase price | $350,000 | $300,000 |
Annual property taxes | $6,300 | $8,400 |
Monthly HOA fee | $350 | $600 |
Monthly taxes and HOA | $875 | $1,300 |
Condo B costs $50,000 less to purchase, but its property taxes and association fees add up to $425 more each month.
That's $5,100 more per year in those two expenses alone.
The lower purchase price could reduce the mortgage payment, but the higher taxes and association fees would offset some of that savings.
Comparing the full cost of each condo gives the homeowner a clearer picture of what they'll spend each month.
Run the Numbers Before You Move
You don't need to have your house listed or a new home picked out to make this comparison.
Start with an estimate of your home's value, your mortgage balance, and what you currently spend on housing.
Then enter the price and expenses of a home you're considering.
Ready to run your own numbers? The Downsizing Cost Calculator lets you compare your current home with a smaller one, including the cash needed to move and the monthly cost of each property.
You can change the numbers to explore different homes and financing options.
If you're unsure what your current home is worth, I can help you develop a realistic estimate of its market value.
Before deciding to downsize, find out what the move would mean for your money.
More Connecticut Real Estate Insights
If you're considering a move, these articles may also help you understand the current market and what to expect:
