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Rent or buy?

Buying builds equity. Renting frees up cash you can invest. This compares the long-run net worth of each path, assuming the same monthly housing budget, so you can see how it shakes out with your own numbers.

This is a rough estimate. The answer is very sensitive to your assumptions, especially the investment return and home appreciation, and it leaves out big non-financial factors like stability, flexibility, and what a home means to you. Treat it as a starting point, not the answer.
Buying
$
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yrs
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$
Renting
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Assumptions
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yrs
Buying comes out ahead by $0 in net worth at the end
If you rent & invest the difference $0 Down payment + monthly savings, invested
If you buy $0 Home equity, net of selling costs
Rent & invest Buy

How this works. Buying builds equity as your home appreciates and the mortgage is paid down; we value it at the end net of a 5% selling cost. Renting invests your down payment plus, each month, the gap between what owning would cost (mortgage, property tax, maintenance, insurance) and your rent. When renting costs more than owning, that gap comes back out of the investments. Both paths assume the same monthly housing budget. We add about 1.5% in upfront buying costs, grow property tax and maintenance with your home's value, and grow rent at the rate you choose.

The taxable option trims the investment return by about 0.5% a year for tax; the registered option assumes tax-free growth. This is general education, not personal financial advice, and a small change in the return or appreciation assumptions can flip the result.

Weighing a first home? There's more on the blog.

Read the blog