Planning estimate only, not financial, tax, or legal advice. Verify assumptions and current rules before making decisions.
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How this calculator works
Formula
The buyer scenario amortizes the mortgage monthly, grows home value, subtracts estimated selling costs and remaining loan, and reports net equity. The renter scenario invests the buyer’s upfront cash and each monthly difference between ownership cost and rent. The result compares buyer equity with the renter portfolio at the selected horizon.
Worked example
Using a $400,000 home, 20% down, 6.5% mortgage, seven-year horizon, $2,200 starting rent, and the displayed cost/growth assumptions, modeled buyer equity is about $173,101 versus a renter portfolio near $187,586, so renting leads by about $14,485.
Assumptions to verify
- Monthly cash-flow differences are invested or withdrawn from the renter portfolio at the entered return.
- Property tax and maintenance scale with modeled home value; insurance is entered separately.
- Tax deductions, investment volatility, moving costs, HOA, utilities, renovations, and local transaction details are excluded.
Frequently asked questions
Why compare wealth instead of only monthly cost?
The renter can invest the buyer’s upfront cash and monthly savings, while the buyer accumulates home equity; comparing only payments misses both effects.
Is the result a forecast?
No. Appreciation, investment returns, rent increases, maintenance, and transaction costs are assumptions that can change materially.
Does it include tax deductions?
No. Tax treatment is personal and jurisdiction-specific, so the calculator excludes deductions rather than assuming a benefit.
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