The real comparison
Renting writes a predictable check for housing service. Buying swaps some rent for mortgage interest, taxes, insurance, maintenance, and transaction costs—while tying up a down payment that could have lived in investments.
Why it matters
A payment quote that ignores roof, HVAC, and selling costs can make ownership look cheaper than it is. A rent figure that ignores annual increases can make leasing look safer than it is.
Break-even thinking
Staying longer spreads closing costs and fixed fees over more months. Moving in two years after buying often loses to renting once you include sell-side friction—even if prices rise modestly.
Line items to include
- Mortgage: principal and interest (P&I).
- Property tax, insurance, HOA, utilities you would not pay as a renter.
- Maintenance reserve (often modeled as 1% of value per year as a rough rule, not a guarantee).
- Opportunity cost on down payment.
Run your city numbers
Mistakes
- Counting full P&I as “building equity” in year one—early years are interest-heavy.
- Ignoring that selling costs often land near 5–10% of price all-in.
Use the calculator
FAQ
- Is buying always an investment?
A primary home is part investment, part consumption—you live in it.
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