🏠 Rent vs Buy

Which option builds more wealth over your horizon.

What it does

Compares renting versus buying over a chosen horizon on an equal budget, estimating the end wealth of each path.

When to use it

Use it before a housing decision. The answer hinges on your horizon, rent vs mortgage ratio, and what the invested down payment could earn.

Assumptions
  • Both paths spend the same budget; the difference is invested at the investment return.
  • Ownership costs include maintenance and property tax but not transaction, legal, or insurance costs.
  • Rent, home prices, and investment returns grow at constant rates.
Inputs
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years
%
%
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%
years
Pro tip

Buying usually wins with a long horizon and rent close to the mortgage; renting often wins when the down payment can earn more than home appreciation. Because transaction costs are excluded, be skeptical of a buy advantage smaller than about 10% of the home price.