Finance
Mortgage vs Rent
Compare buying vs renting over years. Includes principal paydown, appreciation, opportunity cost of down payment, and rent increases.
FAQ
Why include opportunity cost? +
If you put $70K down on a house, that money isn't growing in the market. Renters invest the difference. Comparing buy vs rent without this is comparing apples to oranges.
What about tax benefits? +
Mortgage interest deduction was hugely watered down post-2018 (TCJA raised standard deduction). For most homeowners now, the tax benefit is small. Ignore it for early-year comparisons.
When does buying typically win? +
Holding the house 7+ years usually beats renting at typical appreciation rates. Under 5 years, transaction costs (closing fees, agent commissions) usually make buying lose.