Play · housing economics
Rent vs. Buy
Updated 2026-07-27 · Sources: 5 · Concept: total cost of housing, break-even, counting the cost
"Renting is throwing money away" is a slogan, not a calculation. So is "buying is always a good investment." Both paths build net worth: the buyer builds it in equity (principal paid down plus appreciation, minus the costs of owning and the cost of selling) and the renter builds it by investing the down payment and every month the buyer pays more. This tool runs both lines side by side for thirty years and marks the year buying pulls ahead. Move one slider and that year moves. That instability is the lesson: the answer is situational, and anyone who tells you otherwise is selling something.
Predict first
A $350,000 house, 20% down, a 6.5% mortgage, versus renting the equivalent for $1,800 a month and investing the difference at 8%. In which year does the buyer's net worth pass the renter's?
Pick an estimate, or skip to your own numbers.
A house is also a home. This tool prices the asset, not the life inside it: not the stability of a landlord who cannot raise your rent, not the freedom to move for the right job or the right church, not the neighbors, not the yard, not the repairs you will do on a Saturday. Neither renting nor buying is the more faithful choice. Scripture never commands ownership; it commands counting the cost, keeping your word on what you borrow, and being content either way.
Method: a standard fixed-rate amortization, monthly: payment M = P·r(1+r)n/((1+r)n−1), 30-year term. Buyer net worth = home value − loan balance − selling costs, plus anything invested in months when owning cost less than renting. Renter net worth = the down payment plus every month's cost difference, invested at your chosen return. Defaults and where they come from: mortgage rate 6.5%: Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed average at 6.58% the week of 23 July 2026 (freddiemac.com/pmms); selling cost 6% of sale price: a rule-of-thumb all-in figure (agent compensation plus title, transfer taxes and concessions): note that since August 2024 commissions are explicitly negotiable and are not set by any association (NAR); maintenance 1%/yr of home value, a rule of thumb, and the low end of it: Fannie Mae's homeowner guidance suggests 1% to 4% a year, leaning higher for homes over 30 years old (Fannie Mae); appreciation 3%/yr and rent growth 3%/yr are illustrative round numbers; check your own market against the FHFA House Price Index (fhfa.gov) and the BLS rent index (bls.gov/cpi); 8% investment return is a deliberately modest stand-in for long-run stock returns (investor.gov). What this model leaves out, in both directions: property tax, insurance and HOA dues (which push the break-even year later, often by years), and the mortgage-interest deduction, closing costs at purchase, and taxes on the renter's investment gains. It is a teaching model, not a forecast or advice, and not a substitute for running your own numbers with your own tax situation.
For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?Luke 14:28
KJV. Jesus is teaching the cost of discipleship, not mortgages; his illustration works because counting the cost before committing was obvious sense to everyone listening. Applied here: the cost of a house is not the price, and the cost of renting is not the rent.