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How long do you have to stay before buying wins? Enter both sides and a holding period to see where the two lines cross.
The comparison is not payment against payment. Buying costs the mortgage, property taxes, insurance, and maintenance, plus the opportunity cost of the down payment. Renting costs rent plus whatever that unspent down payment earns invested elsewhere. The output that matters is a break-even holding period: the year cumulative ownership cost drops below cumulative rental cost.
Transaction costs are what push break-even out. Closing costs on the way in run a few percent of price, and selling costs run roughly 6% to 9% once commission and transfer taxes are counted. On a $425,000 purchase that is somewhere around $25,000 to $38,000 of round-trip friction to absorb before ownership starts winning.
Short holds favor renting almost regardless of the other inputs, because transaction costs land entirely in the first and last year. Any version of this comparison showing buying ahead in year one has left selling costs out of the model.
The opportunity cost of the down payment is the line most comparisons skip. $85,000 left invested rather than committed to a purchase compounds over the same period, and omitting it flatters ownership by the entire return on that capital.
Maintenance is an annual cost renters do not carry, and it does not vanish because it went unspent this year. A roof consumed over 25 years accrues whether or not it lands in a given year budget.
The answer is highly sensitive to the appreciation rate and the mortgage rate, and neither is knowable in advance. Running the comparison across a range rather than a single point is what separates a robust conclusion from an artifact of one assumption.
Long enough to amortize round-trip transaction costs of roughly 8% to 12% of price, which puts typical break-even in years rather than months. The exact year depends on the spread between rent and ownership cost, the appreciation rate, and what the down payment would have earned invested.
Interest, taxes, insurance, and maintenance are money spent on housing too, and none of them build equity either. The honest comparison is total cost against total cost, with only principal paydown and appreciation counted as ownership gains.
It should, and this one does. Committing $85,000 to a purchase means forgoing what that capital would have returned elsewhere, and leaving it out is the single most common way a rent versus buy comparison tilts toward buying.
Whichever one you use, run the comparison at zero as well. The zero case shows what the decision looks like on cash and paydown alone, and if buying only wins on an appreciation assumption, that is worth knowing before signing.
They are the reason break-even exists. Commission and transfer taxes of 6% to 9% on a $425,000 sale is $25,500 to $38,250, paid at exit, and every year of ownership spreads that cost a little thinner.
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