Is renting throwing money away?

No — you're buying housing either way. The owner's payment also includes 'thrown away' money: loan interest, property tax, insurance, maintenance, and transaction costs. Early in a mortgage, most of the payment is interest, not equity. The real comparison is total unrecoverable costs on each side plus what the renter's invested down payment earns.

How long do I need to stay for buying to win?

Commonly 5-7 years at today's rates, driven by the ~2-5% you pay to close on purchase and ~6-8% to sell. Short stays almost always favor renting because those transaction costs swamp one or two years of appreciation. Your break-even shifts with appreciation and rent-growth assumptions — that's exactly what this simulator varies.

What appreciation rate is realistic to assume?

U.S. homes have averaged roughly 3-4% nominal a year long-run — close to inflation plus a little. The 2020-2022 surge was an outlier. Be suspicious of any analysis that needs 6%+ appreciation to make buying win; test your decision at 2-3%.

What do first-time buyers most often underestimate?

Maintenance and repairs (a common budget is 1% of home value a year — $4,500 on this home, and lumpy: a roof or HVAC arrives all at once), insurance premium growth, and property tax reassessments. None of these exist for renters, which is why the all-in ownership cost here is $1,142 above rent, not the $200 a naive P&I-vs-rent comparison would show.

Does the renter really invest the difference?

That's the assumption doing the heavy lifting in rent-vs-buy math. The simulation invests the down payment plus the monthly gap at your chosen market return. If the difference would realistically get spent instead, home equity's forced-savings effect is worth real money — adjust the market return down to model that honestly.

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Home · rent vs. buy

Rent vs. buy net-worth comparison

The honest answer: would your money grow faster in a mortgage or in the market? We model both paths side-by-side including selling costs, maintenance, and opportunity cost.

Home

Home price$450,000

Down payment10%

Mortgage rate7.38%

Property tax1.10%/yr

Insurance (mo)$125

HOA (mo)$0

Maintenance1.0%/yr

Home appreciation3.00%/yr

Rent + market

Monthly rent$2,400

Rent increase4.0%/yr

Market return (invested)7.00%/yr

Years7 yr

After 7 years

Buy net worth

$148,960

Rent net worth

$197,245

Renting wins by $48,285 — investing the down payment in the market beats home equity at this horizon.

Buying doesn't break even within 7 years at these inputs.

Net worth over time

Buy (equity after selling costs) Rent (down + differential invested)

Monthly to own

$3,711

P&I + tax + ins + HOA + maint

Up-front cost

$54,000

Down + 2% closing

Rent differential

$1,311

Owner pays more/mo

Quick answer

Rent $2,400 or buy at $450,000 — what does each month cost?

Buying a $450,000 home with 10% down at 6.81% costs about $3,555 a month once you count principal and interest ($2,643), property tax (~$412), insurance (~$125), and 1%-a-year maintenance (~$375) — about $1,155 more per month than $2,400 rent. Whether buying still wins depends on home appreciation, rent inflation, and what the renter earns investing the down payment; the calculator simulates both net worths year by year to find your break-even.

~$3,555/mo

Own (all-in)

$2,400/mo

Rent

~$1,155

Monthly gap

~$375/mo maintenance

Hidden owner cost

Frequently asked questions

How we built this tool

The apples-to-apples framework

Step 1

Owner net worth = equity after selling costs

Home value grows at your appreciation rate. Loan shrinks with each principal payment. Subtract 6% realtor + closing on sale. That's the number that actually goes back in your pocket.

Step 2

Renter net worth = invested capital + monthly differential

The down payment + closing the renter didn't spend gets invested at your assumed market return. Any month where ownership costs more, that delta also gets invested.

Step 3

Break-even is usually 5-8 years

Under 5 years, renting almost always wins because closing costs + selling costs eat owner returns. Past 10 years, buying usually wins unless you picked a bad market.

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