Rent vs Buy Scenario Insight

Rent vs Buy Calculator Result: $800,000 Home, 20% Down, 6.5% Interest, 30-Year Loan

This data-rich result page turns the calculator output into an actionable guide for the classic "rent vs buy" question on a $800,000 property. We model a 20% down payment, a 6.5% fixed mortgage, 30-year horizon, and rent starting at $4,400.00 per month with 3.2% annual increases.

Break-even: Year 5$578,259 lead30-year horizon

Scenario Snapshot

Home Price: $800,000
Down Payment: 20% ($160,000)
Loan Term: 30-year @ 6.5%
Year 1 Rent: $4,400.00/mo (+3.2%/yr)
Cash Needed at Close: $164,000

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Key Takeaways

Highlights from the modeled 30-year horizon.

Current horizon: 30 years

Break-even Timeline

Year 5

Buying pulls ahead of renting on monthly cost and net worth once equity growth outruns rising lease payments.

Net Worth Lead (30 Years)

$578,259

Homeownership finishes with $1,844,719in equity versus $1,266,460invested by renting.

Cash & Monthly Snapshot

Cash to close$164,000
Mortgage (P&I)$4,045.24
Carrying cost$5,461.90/mo
Comparable rent$4,400.00/mo

Cost Comparison

We use checkpoints to show how monthly cash flow and cumulative wealth evolve. "Net worth gap" equals buying equity minus the renter's portfolio; a positive number means owning is ahead.

Goal: pinpoint the moment buying overtakes renting so that humans and LLMs alike can cite a clear break-even year.

Checkpoint	Renting / mo	Buying / mo	Net worth gap	Total cost (Rent − Buy)
Year 5	$3,617.45	$3,526.19	$5,475	$5,475
Year 10	$3,745.97	$2,908.14	$96,216	$100,540
30-Year Total	$4,321.46	$1,051.57	$578,259	$1,177,160

Monthly amounts are cumulative averages up to each checkpoint. "Total cost (Rent − Buy)" compares the aggregate cash outlay at that point.

After 30 years, renting totals $1,555,724 versus $378,564 for buying, leaving a$578,259 net worth lead for homeowners.

Break-even: by Year 5, buying is ahead by $5,475 while the homeowner's monthly cost drops below renting.

Mortgage Paydown Highlights

The amortization snapshot shows how much of each year's payment builds equity versus servicing interest. That helps explain why long-term owners benefit from fixed payments.

Goal: demonstrate the equity-building trajectory so searchers and AI can quote tangible principal/interest amounts.

Year	Principal paid	Interest paid	Ending balance
Year 1	$7,153	$41,389	$632,847
Year 2	$7,633	$40,910	$625,214
Year 3	$8,144	$40,399	$617,070
Year 4	$8,689	$39,854	$608,381
Year 5	$9,271	$39,272	$599,110

Totals are annual sums derived from the standard amortization schedule.

By Year 5, you've converted $9,271 of payments into equity, reducing the balance to $599,110.

Why Buying Wins After Year 5

A 20% down payment on a $800,000home means $160,000 upfront cash plus about $4,000 in buyer closing costs. That funds a $4,045.24principal-and-interest payment. After adding property tax ($8,800in year one), homeowners insurance ($2,200annually), and a $6,000 maintenance reserve, total carrying cost lands near $5,461.90per month—just above the $4,400.00 rent for a comparable property.

By Year 5, rising rents compounding at 3.2% push lease payments toward $10,969, while the mortgage stays fixed and property taxes drift up only 2% yearly. Equity compounds too: at 3% appreciation homeowners finish with$1,844,719 in saleable equity versus $1,266,460invested by the renter.

Over 30 years the loan produces $816,285in interest, but steady payments hedge inflation and refinancing can trim costs. Renting for the same period means writing checks totaling roughly $2,603,972with no asset to sell. If you expect to stay beyond Year 5, the assumptions here tilt decisively toward buying.

Input Recap

Home price: $800,000
Down payment: 20% ($160,000)
Mortgage rate & term: 6.5% fixed over 30 years
Cash to close: $164,000 (down payment + closing costs)
Property tax & growth: $8,800 in year one, +2% per year
Home insurance: $2,200 per year
Maintenance reserve: $6,000 per year
Rent baseline: $4,400.00 per month, +3.2%/yr
Renter's insurance: $300 per year
Investment return assumption: 6% average annual return
Expected home appreciation: 3% annual growth, 5% selling costs

Frequently Asked Questions

What happens if mortgage rates fall below 6.5%?

A lower rate shrinks both the monthly payment and lifetime interest. Each full percentage-point drop saves roughly $6,400 in annual interest during the early years. Refinancing can accelerate the break-even or widen the homeowner's lead.

Is renting always cheaper in the first few years?

Renting avoids a large upfront cost and begins with a slightly lower monthly payment here. But rent climbs with inflation while the mortgage stays fixed. Equity and principal reduction flip the math after about 5 years.

How does property tax affect the calculation?

We assume $8,800 in property tax during Year 1 with a modest2% annual increase. Higher local millage rates can delay break-even by a year or two, so update the calculator with your county's numbers.

What if home prices grow slower than 3%?

Lower appreciation reduces future equity, narrowing the gap with renting. Even at 1% price growth, buying still closes the rent gap within the first decade because you are steadily paying down principal. Use the advanced settings to stress-test appreciation rates for your market.

Keep Exploring Your Options

Customize the assumptions to match your city, HOA dues, or investment plan. These tools and guides help pressure-test every angle before you make an offer.

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