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What Banks Hide

Is buying really better than renting?

The real cost comparison realtors won't show you. Compare true total costs of renting vs buying over any time horizon.

Buy Scenario

National avg ~6.5%

Rent Scenario

Avg ~3%/year
10 years

Buying wins after year 4. Over 10 years, buying leaves you $41,656 ahead.

Buy - net worth

$226,714

after 10 years (net of selling costs)
Rent + Invest - net worth

$185,058

after 10 years
Monthly mortgage

$1,770

Total buy cost (yr 1)

$2,175/mo

Net Worth Over Time

Buying overtakes renting at year 4.

Monthly Cost Over Time

Rent vs Buy
whatbankshide.com
Buying wins over 10 years
Buy net worth$226,714
Rent + invest net worth$185,058
Net worth difference$41,656
Time horizon10 years

How It Works

We model two parallel scenarios year-by-year: buying (build equity through mortgage payments and appreciation, but pay taxes, maintenance, and interest) vs renting + investing (invest the down payment and any monthly savings in the market).

The buy scenario accounts for equity buildup, home appreciation, property taxes, insurance, maintenance, HOA, mortgage interest tax deduction, and 6% selling costs. The rent scenario accounts for rent increases and compound investment growth on the difference.

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Frequently Asked Questions

Why does renting sometimes win?
When you rent, you avoid property taxes, maintenance, insurance, and mortgage interest. If you invest the down payment and monthly savings, that portfolio can sometimes outpace home equity growth - especially in the first few years before equity builds up, and in expensive markets where the price-to-rent ratio is high. Read our full analysis at /guides/should-i-rent-or-buy.
What's included in buying costs?
Our calculation includes the full picture: mortgage P&I, property taxes, home insurance, HOA fees, maintenance costs, and 6% selling costs when you eventually sell. We also account for the mortgage interest tax deduction.
What about the emotional value of homeownership?
This calculator focuses purely on the financial math. The stability, pride, and freedom of owning your home have real value - but they're personal and not something a calculator can quantify. Use the numbers to inform your decision, not make it for you.
How accurate is the home appreciation estimate?
We default to 3.5% annual appreciation, which tracks the U.S. national average over the past several decades. Local markets vary significantly - some metro areas have seen 5-8% annual gains over the past decade, while others have stayed flat or declined. Adjust this based on your area using Zillow, Redfin, or local real estate board data to estimate your market's trajectory. Keep in mind that past appreciation does not guarantee future results, so a moderate estimate is usually the safest planning assumption.
Does this account for selling costs?
Yes. We subtract 6% selling costs (agent commissions and fees) from the home value when calculating buy net worth. This is why buying often looks worse for short stays - you need appreciation to overcome the transaction costs.