Budgeting
Renting vs. Financing
Compare the true long-term cost of buying a home versus renting, including mortgage, taxes, maintenance and the opportunity cost of your down payment.
Buying
Deposit of $10,000
What the deposit could have earned
Renting
Renting is more economical
Renting saves approximately $4,982 compared to buying over 25 years.
Monthly mortgage
$680
Principal and interest
Net position, buying
-$181,687
Equity minus everything spent
Net position, renting
-$176,704
Equity minus everything spent
Crossover Year
Year 24
First year buying beats renting
Final Home Value
$203,279
Opportunity cost
$10,938
Forgone return on the deposit
Total rent paid
$176,504
Over the whole term
29 Sept 2026
Both lines are net position: equity built minus everything spent. Higher is better, and renting can never rise above zero because it builds no equity.
Buying costs include: mortgage payments, property tax (grows with home value), home insurance and maintenance (grow with appreciation), HOA fees, and the opportunity cost of your down payment, which is what it could have earned if invested at your assumed return rate.