Housing learning tool
Rent vs. Buy Cost Explorer
Compare housing costs and projected wealth over your chosen time horizon, including mortgage payments, upkeep, transaction costs, and the opportunity cost of your down payment. Explore how different assumptions change the result.
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Continue with Renting vs. Buying and Understanding a Mortgage.
Educational note: This explorer is intentionally simplified. Housing decisions depend on location, taxes, financing, time horizon, maintenance, mobility, and many personal factors.
When one assumption changes the comparison
Consider a hypothetical $300,000 home, a $60,000 down payment and a 30-year $240,000 loan. Keep property tax at 1.2% a year, insurance at $1,200 a year and maintenance at 1% a year. Compare $1,800 monthly rent.
| Mortgage APR | Principal and interest | Simplified monthly ownership cost | Difference from rent |
|---|---|---|---|
| 6% | $1,438.92 | $2,088.92 | $288.92 higher |
| 4% | $1,145.80 | $1,795.80 | $4.20 lower |
Only the rate changed. The lower rate reverses this narrow monthly cash-flow comparison, but does not establish that buying is the better overall choice. The $60,000 up-front down payment, closing and selling costs, rent changes, opportunity cost, maintenance uncertainty and time in the home still matter. Mortgage principal also builds equity, so cash outflow and economic cost are different.
Enter these examples above, then change one assumption. Continue with Understanding a Mortgage.