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Rent or buy:
the year it turns.

Two families, same money. One buys and pays the mortgage, tax, insurance and upkeep. The other rents and invests the down payment and every dollar of difference. Here is what each is worth, year by year.

Appreciation and selling costs counted · Renter invests the difference · 30 years

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Buying pulls ahead in

Year 9

If you buy, year 30

$1,666,776

If you rent, year 30

$1,095,767

Net worth from this choice alone: the home after selling costs and the mortgage, against the renter’s investments.

Net worth, buying against renting Buy Rent and invest
9

An illustration, not a forecast. Home prices, rents and investments can fall as well as rise. Taxes are left out of both sides.

The home and the rent

$
% of price
%
$/mo
Fine-tune 11 more inputs
% of price
% of value a year
$/yr
% of value a year
$/mo
% a year
% a year
% a year
% a year
% of the sale price
Agent commission, transfer tax and fees when you sell. Taken off the home’s value in every year shown, as if you sold then.

Defaults are labelled assumptions, not forecasts: 3% a year for home prices, rent and costs, 6% a year for a diversified portfolio after fees.

The turning point

Buying pulls ahead in

Year 9

Cash to buy Down payment and closing costs
$0
Mortgage payment Principal and interest
$0
Owning, first month With tax, insurance, upkeep and fees
$0
Renting, first month
$0
If you buy, year 30 Home after selling costs, plus any invested savings
$0
If you rent, year 30 The renter’s investments
$0
Buying ahead by
$0

An illustration, not financial advice. Taxes are left out of both sides: no capital gains tax on the renter’s investments, no tax on the home sale (a main home sold after two of the last five years lived in can exclude up to $250,000 of gain, $500,000 on a joint return), and no mortgage interest deduction. With the 2026 standard deduction at $32,200 for a married couple, many families don’t itemize, so the interest deduction changes nothing for them; if you do itemize, buying looks somewhat better than shown. Mortgage insurance (PMI) on loans with less than 20% down is not included, nor renter’s insurance.

Figures checked November 2026. Sources: IRS, 2026 standard deduction (Rev. Proc. 2025-32) · IRS, sale of your home · IRS, interest expense.

Year by yearBoth net worths at the end of each year
YearHome valueLoan leftIf you buyIf you rentDifference

How the two lines are built.

If you buy

  • Each month you pay principal and interest, property tax and upkeep as a share of the home’s value, insurance and any HOA fee.
  • The home grows at the rate you set. Your worth is its value less selling costs, less what you still owe.
  • When renting costs more than owning, as it often does later on, the owner invests the difference too.

If you rent

  • Day one the renter invests what the buyer spent on the down payment and closing.
  • Each month the renter invests whatever owning would have cost above the rent.
  • Rent rises once a year at the rate you set; investments compound monthly.

Why this differs from the home analyzer

  • The home purchase analyzer compares monthly costs and leaves out appreciation and what the down payment could earn elsewhere.
  • This tool counts both, which is why its answer can differ. Use the analyzer for the monthly budget, this for the long view.
  • It is sensitive. A point on the investment return or on home growth can move the year a lot. Try a few.