Compare the long-term financial outcome of renting vs. buying a home, including appreciation, closing costs, and investment opportunity cost. No signup required.
Renting Scenario
Home Equity (buying)
$214,743
Investments (renting)
$240,274
Breakeven Year
Beyond 7y
| Year | Home Equity | Renter Net Worth | Advantage |
|---|---|---|---|
| 1 | $82,069 | $122,071 | Rent +$40,002 |
| 2 | $101,942 | $140,972 | Rent +$39,030 |
| 3 | $122,657 | $160,201 | Rent +$37,545 |
| 4 | $144,252 | $179,753 | Rent +$35,500 |
| 5 | $166,769 | $199,620 | Rent +$32,851 |
| 6 | $190,251 | $219,797 | Rent +$29,546 |
| 7 | $214,743 | $240,274 | Rent +$25,531 |
It compares two outcomes after your chosen time horizon: the equity you'd have in a home (value minus remaining mortgage minus selling costs) vs. the net worth a renter would have if they invested their down payment, closing costs, and any monthly savings from renting instead of buying.
The breakeven point is the year at which owning a home becomes more financially favorable than renting and investing the difference. Before that point, renting may leave you with more net worth.
Yes. Closing costs are added as a one-time upfront cost when buying, and selling costs are subtracted from your home equity at the end of the comparison period, since you'd typically pay agent fees and closing costs to sell.
A common assumption is the long-term average stock market return (historically around 7-8% before inflation). Use a rate that matches how you'd realistically invest the money you save by renting.