Should you rent or buy? Compare the true long-term cost of each path.
Renting
$
What you'd pay per month to rent%
Typical: 2-5% per yearBuying
$
Purchase price of the property%
$200,000.00 down%
Current 30-year fixed rateyears
How long you plan to ownyears
30 years is standardMonthly Cost Comparison
Renting
$5,025.00/mo
Rent$5,000.00
Renter's insurance$25.00
Buying
$6,879.74/mo
Mortgage (P&I)$4,796.40
Property tax$1,000.00
Insurance$250.00
Maintenance$833.33
Your Results After 30 Years
Buying comes out ahead by$1,201,975.01after 30 years
Rent net: - $1,776,076.95vsBuy net: - $574,101.94
Based on your assumptions
Renting
Total Rent Paid
$2,863,524.94
Rent + Insurance + Fees & Moving = Total
$2,854,524.94 + $9,000.00 + $0.00 = $2,863,524.94
Investment Account
$1,082,448.00
Capital Invested + Monthly Savings + Growth = Account
$220,000.00 + $0.00 + $1,062,439.32 = $1,082,448.00
$220,000.00 invested at 5% grew over 30 years
Net Financial Position
- $1,776,076.95
Investment Account - Total Rent + Deposit = Net Position
Buying
Total Cash Contributed
$2,883,533.62
Down Payment + Closing Costs + Monthly Payments = Total
$200,000.00 + $20,000.00 + $2,663,533.62 = $2,883,533.62
Cash Recovered at Sale
$2,309,431.68
Home Value - Selling Costs - Remaining Loan = Cash Back
$2,456,842.21 - $147,410.53 - $0.00 = $2,309,431.68
Net Financial Position
- $574,101.94
Cash Recovered - Total Contributed = Net Position
Negative = housing cost more than you recovered at sale
Rent net position- $1,776,076.95
Buy net position- $574,101.94
Difference$1,201,975.01 in favor of buying
Where Your Money Went (Buying)
Net Financial Position Over Time
The buy line reflects home equity minus all costs; the rent line reflects the investment account minus rent paid.
Buy — net cost of housing Rent — net financial position
What Happened Here
Buying costs $1,854.74 more per month than renting at the start.
Of your total mortgage payments, $926,705.51 went to interest - money that does not build equity. The home appreciated by $1,456,842.21 over 30 years.
In this scenario, buying comes out ahead because home appreciation and equity buildup exceeded the cost advantage of renting and investing. Buying pulled ahead around year 19.1.
What Would Change This Result?
To make renting outperform, one or more of these would need to change:
If you moved after just 5 yearsRenting would be $367,121.66 ahead
If appreciation were only 2%Buying advantage narrows to $804,334.98
If mortgage rate were 7.5%Buying advantage narrows to $251,373.05