"Rent or buy?" is a question every city worker faces. Some say renting is throwing money away; others say buying is overpaying when prices stall. Let's skip the opinions and run the 30-year numbers so you can decide with clarity.
How to Compare the Full Picture
- Total cost of buying = down payment + monthly payments × months + taxes/maintenance − resale value after 30 years
- Total cost of renting = rent × months (and rent rises every year)
The key variable is opportunity cost: what could your down payment earn if invested instead? Many people overlook this. Use the compound interest calculator to project what your down payment could grow to.
Worked Example: $150K Down Payment
Assume $150K down, $150K mortgage at 4.0% for 30 years (monthly payment ≈ $716); the same area rents for $750/month, rising 3% yearly.
| Item | Buy (30 yrs) | Rent (30 yrs) |
|---|---|---|
| Initial outlay | $150K down | None (monthly rent) |
| Total interest/rent | ≈ $108K interest | ≈ $428K cumulative rent |
| Asset after 30 yrs | A home | None — but down payment can compound |
Renting looks pricier, but don't ignore: if the renter invests that $150K at 5% annual compounding, it grows to roughly $648K in 30 years. The winner depends on home price growth, rent growth, and investment returns — plug in your own numbers with the mortgage calculator and compound interest calculator.
When Buying Makes Sense
- Homeowner by choice: marriage, schooling, stability matter more than returns
- Affordable payments: monthly payment under 50% of household income
- Stable cash flow and long-term conviction in the city
When Renting Makes Sense
- Job mobility: may relocate; renting keeps you flexible
- Thin down payment or over-leveraged: a stretched budget is risky
- Stronger investment returns than home appreciation
Run Your Own Numbers
- Use the loan calculator to confirm your monthly payment and total interest
- Use the compound interest calculator for the opportunity cost of your down payment
- Compare home price growth, rent growth, and investment returns
Buying isn't mandatory, and renting isn't settling. Run the 30-year totals, and whichever path you choose, it will be an informed one.