Housing Decision
Rent or Buy?
Weigh the full cost of owning against renting and investing the difference to see which leaves you wealthier.
Time Horizon
How long you expect to stay
Buying
Purchase, financing and ownership costs
$130,000
Renting
Comparable rental costs
Market Assumptions
Applied to both scenarios
After 10 years
Renting comes out ahead
Buying does not break even within 10 years under these assumptions.
$51,133
net worth advantage
Break-even
—
Not within 10 years
Buying, Month 1
$4,724
Incl. $3,287 mortgage
Renting, Month 1
$3,220
Rent plus renters insurance
Net Worth Over Time
If You Buy
If You Rent
AheadYear-by-Year
Annual| Year | Cost to Buy | Cost to Rent | Buy Net Worth | Rent Net Worth |
|---|---|---|---|---|
| 1 | $56,691 | $38,640 | $118,197 | $176,521 |
| 2 | $57,259 | $39,798 | $146,532 | $204,573 |
| 3 | $57,846 | $40,991 | $176,057 | $233,702 |
| 4 | $58,452 | $42,219 | $206,827 | $263,957 |
| 5 | $59,078 | $43,484 | $238,899 | $295,389 |
| 6 | $59,726 | $44,788 | $272,335 | $328,050 |
| 7 | $60,395 | $46,130 | $307,198 | $361,999 |
| 8 | $61,087 | $47,512 | $343,556 | $397,293 |
| 9 | $61,802 | $48,936 | $381,478 | $433,996 |
| 10 | $62,541 | $50,403 | $421,040 | $472,173 |
Net worth for buying is the home's sale value less selling costs and the remaining loan balance, plus any savings invested in years when owning cost less than renting. Net worth for renting is the down payment and closing costs invested from day one, plus savings invested in years when renting cost less. Results exclude income taxes, mortgage interest deductions, capital gains exclusions and PMI, and are hypothetical estimates.