Mortgage vs Renting (Detailed)
30-year comparison: ownership equity + appreciation vs rent + alternative-investment growth.
Result
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How to use this calculator
- Enter home price and down payment.
- Enter mortgage rate, equivalent rent, expected investment return, and home appreciation.
- Compare net wealth at the end of the period.
About this calculator
A simplified 30-year comparison. Buying captures home appreciation but pays interest. Renting + investing captures market returns on what you didn't spend. The result depends heavily on assumed appreciation, investment return, and the mortgage-to-rent gap. Caveats: this calculator simplifies maintenance, taxes, insurance, transaction costs — for production decisions, run a more detailed analysis or work with a financial planner.
Frequently asked
What about property tax and maintenance?+
Not modeled here for simplicity. Typical: 1.5% property tax + 1.5% maintenance per year. Add these to monthly cost for a full picture.
Does this account for tax deductions?+
No — mortgage-interest deduction phases out for many filers post-2018 SALT cap. Adjust calculations if you itemize.
When does buying win?+
High appreciation, long horizon (10+ years), affordable mortgage rate. When markets are flat or you might move soon, renting often wins.
Is this real estate-specific?+
Yes — assumes housing-style appreciation. Won't generalize to other assets.
Why does my answer change so much with appreciation rate?+
Because home equity scales with appreciation^years. Small changes compound dramatically over 30 years.
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