Buy vs rent scenario
Buy vs rent over fifteen years
Over fifteen years equity, rent growth and renewals matter more than closing and selling costs.
After 15 years, buying finishes ahead of renting by about $91,982. On these assumptions buying overtakes renting after about 5.7 years, once selling costs are counted.
Year-by-year results for this scenario
After 15 years, buying finishes ahead of renting by about $91,982. On these assumptions buying overtakes renting after about 5.7 years, once selling costs are counted. The owner's first-month cash cost is $3,757, compared with $2,325 for the renter.
| Year | Home value | Mortgage balance | Buyer net worth | Renter net worth | Buying minus renting |
|---|---|---|---|---|---|
| 1 | $621,000 | $469,303 | $117,835 | $150,940 | −$33,105 |
| 2 | $642,735 | $458,120 | $149,966 | $176,418 | −$26,452 |
| 3 | $665,231 | $446,428 | $183,341 | $202,855 | −$19,514 |
| 4 | $688,514 | $434,203 | $218,008 | $230,289 | −$12,281 |
| 5 | $712,612 | $421,423 | $258,759 | $258,763 | −$4 |
| 10 | $846,359 | $348,248 | $460,065 | $418,379 | $41,686 |
| 15 | $1,005,209 | $256,837 | $703,653 | $611,671 | $91,982 |
Questions people ask
Does buying beat renting in this scenario?
After 15 years, buying finishes ahead of renting by about $91,982. On these assumptions buying overtakes renting after about 5.7 years, once selling costs are counted.
What changes in this scenario?
Over fifteen years equity, rent growth and renewals matter more than closing and selling costs. All other inputs keep the calculator’s default planning values.
Is this a forecast?
No. It is an illustration of how one assumption changes the buy vs rent comparison. Replace the inputs with your own numbers.
Other buy vs rent scenarios
- 5% down, 30-year amortization
- 20% down, ten years
- Five-year stay
- Seven-year stay
- Full amortization
- Rates at 6.5%
- Rates at 3.5%
- 4.5% now, 7% at renewal
Educational illustration; not advice. See the assumptions.