How we compare renting and buying
Comparing a rent check to a mortgage payment leaves out most of the picture. Buyers also pay property tax, insurance, upkeep, and closing costs, and they lose a slice of the sale price to agent fees when they move. Renters skip all of that, and they keep their down payment, which can grow in the market instead.
So this calculator tracks your net worth both ways. Both paths start with the same cash. Each month, whichever choice is cheaper invests the difference at your investment return. If you buy, your net worth is what you'd walk away with after selling the home, plus anything you invested. Buying usually loses over short stays and wins over long ones; the break-even shows where it flips. Taxes on investment gains and the mortgage interest deduction are left out, since for most people they don't change the answer.