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Rent vs. buy
Is it cheaper to keep renting or to buy? This compares the two the way economists do — counting what your down payment could earn invested, what the home gains, and what selling it costs.
Breakeven
Buying comes out ahead after about 29 years.
Over 7 years, renting leaves you about $46,364 better off.
Assumes a $300,000 price, 20% down, 30-year fixed rate at 7.24% (APR 7.24%). Includes taxes and insurance; mortgage insurance not included. APR assumed equal to the rate; actual APR will be higher with lender fees. Estimate only. Not a loan offer or commitment.
| Year | Wealth if you buy | Wealth if you rent | Difference |
|---|---|---|---|
| 1 | $49,697 | $82,301 | -$32,603 |
| 2 | $60,820 | $95,960 | -$35,140 |
| 3 | $72,389 | $109,986 | -$37,597 |
| 4 | $84,425 | $124,388 | -$39,963 |
| 5 | $96,952 | $139,175 | -$42,223 |
| 6 | $109,994 | $154,356 | -$44,362 |
| 7 | $123,577 | $169,940 | -$46,364 |
| 8 | $137,728 | $185,938 | -$48,210 |
| 9 | $152,477 | $202,359 | -$49,881 |
| 10 | $167,855 | $219,212 | -$51,357 |
| 15 | $255,390 | $310,319 | -$54,929 |
| 20 | $364,527 | $413,797 | -$49,270 |
| 25 | $502,848 | $531,837 | -$28,989 |
| 30 | $692,547 | $678,773 | $13,773 |
Simplified: ignores income-tax effects (most households take the standard deduction), renter's insurance, and taxes on investment gains. Taxes grow at most 3% a year (Oklahoma's homestead cap); insurance grows with the home's value. Conventional mortgage insurance applies under 20% down until the loan reaches 78% of the price.