An apples-to-apples net-worth comparison: buying a home vs. renting and investing the difference.
| Buy | Rent |
|---|
Both paths spend the same total each month; whoever's housing costs less invests the difference at your investment return. The renter also invests the cash the buyer sank into the down payment and closing costs.
Estimates only — not financial advice. Results are extremely sensitive to the assumed home-appreciation and investment-return rates, which are guesses, not guarantees. Home appreciation is not risk-free, and investment returns carry market risk.
Both the renter's and the buyer's invested savings grow in a taxable brokerage account, so this model taxes their gains at your capital-gains rate when compared. Your home's gain is treated as untaxed under the §121 primary-residence exclusion (up to $250k single / $500k married). The mortgage-interest and property-tax deduction only helps to the extent your itemized total (interest on the first $750k of loan, plus state + local taxes capped at $40,400 for 2026) exceeds your standard deduction — most filers get $0 benefit, so the default marginal rate is 0.
Mortgage insurance is now modeled: conventional PMI below 20% down (dropping at 78% loan-to-value), FHA up-front + life-of-loan MIP, and the VA funding fee (financed). PMI/MIP rates, SALT caps, and §121 limits vary and can change; taxes here are simplified estimates. The model still ignores rent deposits and assumes you reinvest cost differences per the slider settings.
Use it to build intuition about the levers — then confirm specifics with a qualified financial and tax professional.