Why does the holding period matter?
Buying and selling costs are concentrated around the transaction. More years give appreciation and principal reduction additional time to absorb those costs.
LEVEL 300 · STEP CLIMB
Rent vs. Buy Calculator
Compare the wealth created by buying with the wealth created by renting and investing the difference.
Assumes fixed rates and costs, monthly investing, annual rent increases, and a sale at the end of the chosen period. Taxes and investment fees are excluded.
MODELED RESULT—
HOW TO USE THE RESULT
Rent versus buy is a timeline decision
Buying converts some payments into equity but adds transaction costs, maintenance, taxes, insurance, and concentrated property exposure. Renting can preserve flexibility and invest cash that would otherwise become a down payment. The expected holding period often matters more than the first monthly-payment comparison.
Is rent throwing money away?
No. Rent buys housing and flexibility. Mortgage interest, taxes, insurance, maintenance, and transaction costs also do not become equity.
What assumption changes the answer most?
Home appreciation, investment return, maintenance, rent growth, and the actual time in the property can each flip the result. Stress-test all five.
OPTIONAL NEXT TESTS