How much equity should we have in our starter home before trying to sell and upgrade?

You should aim for at least 20% to 25% equity before selling. While you can technically sell with as little as 10%, that small margin is usually swallowed entirely by 2026 selling costs (commissions, taxes, and closing fees), leaving you with zero cash for your next down payment. Having a 20% buffer ensures you can cover the move, pay the agents, and still have a significant "equity roll-over" to keep your next mortgage payment manageable at current rates.

There is no magic equity number, but a general benchmark is having enough to cover your selling costs (typically 8-10% of the sale price in Florida) plus a down payment on the next home. For most move-up buyers, that means at least 15-20% equity in the current home before the math works comfortably. In Hernando County, where median prices have been climbing steadily, many homeowners who bought in 2020-2022 have built more equity than they realize. A no-obligation comparative market analysis from a local agent can give you a realistic number in about 48 hours. That is the fastest way to know where you stand without guessing. The other factor is your debt-to-income ratio. Even if you have strong equity, your lender will qualify you based on your total monthly obligations. Run the numbers on both sides -- what you will net from the sale and what you can afford on the next purchase -- before listing. Timing the sale and purchase together in Florida requires planning, but it is very doable with the right strategy. Know your equity, know your DTI, and the upgrade timeline will come into focus. -- Kevin Neely & Kaitlynd Robbins | K2 Sells

It usually makes sense to sell once you have enough equity to cover selling costs and still walk away with something meaningful for your next down payment. As a rule of thumb, plan for about 7 to 9% of the sale price going to commissions and closing costs. After that, you want enough left to put yourself in a comfortable position on the next home. Most people hit that point around 3 to 5 years, but it really depends on how much your home has appreciated and the extra payments you’ve made. If values have gone up, you may already be there. If not, it can feel tight. A simple way to look at it is this. If you can sell, cover your costs, and still move into your next home without stretching yourself, you’re ready. If not, it may make sense to wait a bit longer or adjust the plan.

That’s a great question, and you’re exactly right that a common rule of thumb is to have around 20% equity before you sell. That’s usually enough to cover typical selling costs (often 7–10% of the price) and still walk away with money for your next down payment.

Abigail, here’s the simplest way to look at it: The Rule of thumb is to aim for 10%–15% equity (ideally 20%) to cover selling costs and still have money for your next home. At 3 years - Most equity comes from appreciation, not paydown—so value growth matters more than time owned. Make sure to ask your agent - What will you net after selling costs and your loan payoff? Typcially, I see that most sellers need 3–5 years, but the real question to consider is whether your net proceeds put you in a strong position to upgrade. Hope that helps :)

Great question and very common. A general rule of thumb is to stay in a home at least 3–5 years to offset closing costs, commissions, and build some equity. That said, it really depends on your local market and how much your home has appreciated. Since you’ve already been there about three years and made extra payments, you may be in a better position than you think. The key is to look at your current home value, what you still owe, and estimated selling costs to see what you’d net. The best next step is to run the numbers. You might have enough equity for your next purchase without needing to wait—and if not, you’ll at least know exactly where you stand.