Buy vs rent scenario
Buy vs rent for a house with a rental suite
A suite or basement unit can pay a large share of the mortgage. The case counts vacancy and tax on the income.
After 10 years, buying finishes ahead of renting by about $221,534. On these assumptions buying overtakes renting after about 2.3 years, once selling costs are counted.
Year-by-year results for this scenario
After 10 years, buying finishes ahead of renting by about $221,534. On these assumptions buying overtakes renting after about 2.3 years, once selling costs are counted. The owner's first-month cash cost is $3,339, compared with $2,625 for the renter.
| Year | Home value | Mortgage balance | Buyer net worth | Renter net worth | Buying minus renting |
|---|---|---|---|---|---|
| 1 | $724,500 | $547,521 | $137,891 | $163,408 | −$25,517 |
| 2 | $749,858 | $534,473 | $175,377 | $180,331 | −$4,954 |
| 3 | $776,103 | $520,832 | $214,315 | $197,310 | $17,005 |
| 4 | $803,266 | $506,571 | $254,759 | $214,322 | $40,438 |
| 5 | $831,380 | $491,660 | $302,303 | $231,343 | $70,960 |
| 10 | $987,419 | $406,289 | $537,159 | $315,624 | $221,534 |
Questions people ask
Does buying beat renting in this scenario?
After 10 years, buying finishes ahead of renting by about $221,534. On these assumptions buying overtakes renting after about 2.3 years, once selling costs are counted.
What changes in this scenario?
A suite or basement unit can pay a large share of the mortgage. The case counts vacancy and tax on the income. 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
- Fifteen-year stay
- Full amortization
- Rates at 6.5%
- Rates at 3.5%
Educational illustration; not advice. See the assumptions.