Pricier Home vs. Private Tuition: Which Costs Homebuyers More?

For parents with school-age kids, choosing where to buy a home can come with a very expensive question: Do you pay more for a house in a highly rated public school district, or buy somewhere cheaper and put the difference toward private school?

At first glance, private school may seem like the pricier option. Tuition is money you spend and never see again, while a more expensive home gives you an asset that can build equity and appreciate over time.

But the math isn’t quite that simple. Higher property taxes, a bigger down payment, mortgage interest, and the opportunity cost of tying up more money in a house all count, too.

So, which option actually leaves a family better off? We ran the numbers in the Chicago area over 13 years. In our example, buying in the pricier public-school district came out ahead (but not for the reason you might think).

A $892,250 house or a $30,000-a-year private school?

Consider two hypothetical families with one child starting kindergarten.

One buys a roughly $892,250 home in Wilmette, IL, where families have access to highly regarded public schools, including New Trier Township High School. 

The other buys a roughly $383,000 home in Chicago and sends their child to Chicago Waldorf School, where tuition currently ranges from about $28,000 to $35,000 per year depending on grade.

Both families pay property taxes. That’s important.

“This scenario sets families up to compare a mortgage payment with a tuition bill. That’s a limited comparison, because you pay school taxes either way,” says Colton Pace, co-founder and CEO of Ownwell.

To see how the two options might play out, we modeled 13 years assuming a 20% down payment, a 30-year mortgage at 6.66%, 3% annual home appreciation, 3% annual growth in property taxes and private-school tuition, and a 5% return on money the Chicago family could invest instead of putting it toward the more expensive home.

Here’s where the families could stand when their child graduates:

After 13 years, the Wilmette family ends up with roughly $751,000 in home equity. The Chicago family has about $323,000 in home equity plus an estimated $311,000 invested elsewhere, putting its combined assets at around $634,000. That’s roughly a $117,000 advantage for the Wilmette family in our model.

Of course, change the home appreciation rate, investment returns, tuition increases, property taxes, or the particular homes and schools involved, and the gap could shrink, grow, or even flip. But the exercise shows why comparing a mortgage payment with a tuition bill doesn’t tell the whole story.

Add a second child, and the math changes fast

Our example gets much more lopsided when another child enters the picture.

“The tax on your property will be roughly the same whether you have one kid or five. However, the amount you pay to send your kids to private school will rise dramatically as you add each new child,” says Melanie Zimmerman, a real estate agent at MVP Executive Development.

Chicago Waldorf’s current tuition ranges from $28,200 for kindergarten to $35,300 for high school. At today’s prices, 13 years would total about $414,000. Assuming tuition rises 3% annually, our model puts one child’s K–12 cost at roughly $501,000.

Put two children through the same school, and a family could easily be looking at around $1 million in combined tuition, depending on their ages, tuition increases, financial aid, and any sibling discounts.

Meanwhile, the Wilmette family’s mortgage and property taxes don’t double because they have another child.

That’s one reason Zimmerman says the scales may start tipping toward the more expensive public-school district once a family has two or three kids.

Taxes could soften the blow, but don’t count on today’s rules forever

There are tax breaks to consider on both sides.

For 2026, taxpayers who itemize can deduct up to $40,400 in state and local taxes, although that deduction begins phasing down for higher-income households. That could make a hefty property-tax bill slightly less painful for some families.

Private-school families have a potential tax break, too. Beginning in 2026, up to $20,000 per beneficiary per year can be withdrawn tax-free from a 529 plan for qualifying K–12 expenses.

But families making a 13-year decision shouldn’t assume today’s tax rules will stick around for their child’s entire education.

“If you’re building a 15-year model, you can’t apply today’s rules to all 15 years,” Pace says. “Too many political factors are at play.”

The cheaper house may buy you something else: Flexibility

There is one big advantage to the cheaper house/private school route that won’t show up neatly in a net worth calculation: You have more ways to change course.

If one parent loses a job ot takes time away from work, or the family’s finances otherwise change, private school tuition can potentially be reduced through financial aid or eliminated by switching to public school. A larger mortgage and property tax bill are much harder to shed without selling the house.

“A greater fixed housing expense limits a household’s ability to create flexibility in its cash flow over the short term,” Zimmerman says.

That’s not necessarily an argument against buying in the more expensive district. But Zimmerman says families should make sure the higher housing payment won’t strain their budget before counting on future appreciation to make the decision worthwhile.

Remember, your kids eventually graduate

There’s one final question worth asking before paying a premium for a particular school district: Would you still want to live there if the schools weren’t part of the equation?

“One thing I remind our clients who are weighing these options is that purchasing an expensive home often outlasts the window of kids attending school,” says Jeremy Olsher, principal at Mizner Residential Group – Compass FL. “So when their kids graduate, they need to ask themselves whether they will still be happy in the home and its location, and will that location maximize a return on investment when it’s time to downsize or retire?”

Ultimately, neither option is automatically cheaper. With one child, our Chicago-area example put the pricier home and public schools ahead by roughly $117,000 after 13 years. With multiple children, the math could tilt even further in that direction as tuition multiplies while housing costs largely don’t.

But the better choice is one your family can comfortably afford today, and one that still makes sense if your income, family size, or plans look very different 13 years from now.