Personal capital · housing

Rent vs. Buy with Opportunity Cost

Both households to the same horizon: the owner sells and nets the proceeds, the renter invests the down payment and the monthly difference. The comparison is net worth, not monthly payment.

01The purchase

Home price$Down payment%Mortgage rate% / yrTermyearsClosing costs% of priceSelling costs% of sale

02Cost of owning

Property tax% / yrInsurance$ / yrHOA$ / monthMaintenance% / yrAppreciation% / yr

03The alternative

Rent$ / monthRent growth% / yrPortfolio return% / yrWhat the invested down payment earns.Horizonyears

Excluded: mortgage-interest tax deductibility (standard-deduction phase-outs make it personal), renter's insurance, and any reinvestment of home equity before sale. The renter invests the down payment, closing costs and the monthly difference, and draws down when owning is cheaper in a given month. Property tax and maintenance are held at today's price level; appreciation compounds annually on the purchase price.