Real estate finance

Buy vs Rent Ledger

Net worth of owning a home versus renting and investing the difference — the down payment, and every dollar the cheaper option frees up, compounding at your alternative return.

Breakeven
—
Net advantage, year 15
—

Saved scenarios

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Simple mode: set home price and rent — every other assumption uses a realistic default.

Home & financing

$
%
%
%/yr
yrs

Ownership costs

%/yr
%/yr
%/yr
$
%/yr

Appreciation & exit

%/yr
% value

Renting instead

$
%/yr

Opportunity cost

%/yr
%/yr
yrs

Shown in future (nominal) dollars, not inflation-adjusted.

Breakeven point
—
Net advantage at horizon
—
buying vs. renting
Home equity, net of sale
—
if sold at horizon
Portfolio if renting
—
down payment + savings, invested

Net advantage of buying, over time

Home equity (net of sale) + invested savings, buying minus renting

Buying ahead Renting ahead
Year-by-year ledger
Year Home value Mortgage balance Equity, net of sale Buyer portfolio Renter portfolio Net advantage

What moves the breakeven point

Each assumption shifted by a realistic amount, others held constant

Earlier breakeven Later breakeven