Rent Vs Buy Examples
Understanding the true costs and benefits of renting versus buying requires a detailed look at various scenarios, considering factors like transaction costs, equity build-up, and the opportunity cost of your capital. These examples illustrate diverse situations to help you make an informed decision beyond surface-level comparisons.
Worked Examples
See the inputs and outcome together
Each scenario keeps the starting point, the outcome, and the actual lesson in one place so the page reads like a decision notebook, not a data dump.
- 1
Baseline case
Run the default sample case before changing anything else.
The calculator lands with net advantage at horizon at -10,180.2 and equity at horizon at $296,897.
Home Price
$500,000
Down Payment Percent
20.0%
Mortgage Rate Percent
6.00%
Loan Term Years
$30.00
Home Price is worth watching because it moves net advantage at horizon fastest in this scenario.
- 2
Higher Home Price
Increase home price while keeping the rest of the case steady.
The calculator lands with net advantage at horizon at -80,639.2 and equity at horizon at $341,432.
Home Price
$575,000
Down Payment Percent
20.0%
Mortgage Rate Percent
6.00%
Loan Term Years
$30.00
Home Price is worth watching because it moves net advantage at horizon fastest in this scenario.
- 3
Lower Down Payment Percent
Reduce down payment percent while keeping the rest of the case steady.
The calculator lands with net advantage at horizon at -10,482 and equity at horizon at $284,344.
Home Price
$500,000
Down Payment Percent
17.0%
Mortgage Rate Percent
6.00%
Loan Term Years
$30.00
Down Payment Percent is worth watching because it moves net advantage at horizon fastest in this scenario.
- 4
Higher Mortgage Rate Percent
Increase mortgage rate percent while keeping the rest of the case steady.
The calculator lands with net advantage at horizon at -118,818 and equity at horizon at $280,023.
Home Price
$500,000
Down Payment Percent
20.0%
Mortgage Rate Percent
8.10%
Loan Term Years
$30.00
Mortgage Rate Percent is worth watching because it moves net advantage at horizon fastest in this scenario.
Patterns
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Sources & References
- Rent vs. Buy: The Case for Each — Investopedia
- The Economics of Housing: Rent vs. Buy — Federal Reserve Bank of St. Louis
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