Free Financial Model
Rent vs. Buy Analyzer
A rigorous mathematical breakdown comparing the true sunk costs of buying (interest, property tax, maintenance) versus the opportunity cost of renting and investing the difference in the stock market.
Purchase Scenario
Rental Scenario
Market Assumptions
After 10 years, it is better to
buy
by +$105,717 in net wealth.
Renting WealthBuying Wealth
Net Worth if Renting
$215,097
Assumes down payment and monthly savings are invested at 7%.
Total Rent Paid (Lost)
$309,709
Net Worth if Buying
$320,814
Home value ($592,098) minus remaining loan ($271,284).
Total Sunk Costs (Tax/Int\Maint)
$294,849
Sunk Cost vs Opportunity Cost Logic
This is not a simple monthly cash-flow calculator. We execute a full wealth-accumulation model utilizing the Opportunity Cost Principle over 5, 10, and 30-year horizons.
- Renter's Portfolio: We assume the renter immediately invests their unspent Down Payment into an index fund at the specified Market Return rate. Furthermore, any month where renting is cheaper than buying, the exact difference is dynamically deposited and compounded into the stock portfolio.
- Buyer's Sunk Costs: We separate principal paydown (forced savings) from unrecoverable sunk costs which include mortgage interest, annual maintenance, and property tax streams.
- Inflation Mechanics: Rent is assumed to increase annually based on the inflation multiplier, while the home value appreciates independently.