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Buy vs Rent House - Which Is Best?


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Published on Oct 29, 2019
Is it better to buy or rent your house? The buy vs rent house decision is made more difficult because most of us think that renting is throwing away money. But if you buy a house you're throwing away interest payments on the mortgage and maintenance costs for the house plus the huge costs of purchasing and selling. We look at different ways of comparing the option to buy or rent.

We also provide a spreadsheet so you can play with the assumptions for yourself.

*** Correction *** Thanks for those who pointed out we aren't subtracting the cost of share purchases in the rent net value comparison. The spreadsheet is now updated to reflect this. The breakeven for the mortgage rate is now 4.5% rather than 3%. However, the conclusion is the same, which is that the benefit of buying is not so clear-cut as you might think. Also, mortgage rates of more than 4% are likely over the next 25 years.

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