Rent vs Buy: Running the Comparison Honestly
Rent is not wasted money. It is the price of flexibility, and sometimes that is the better buy.
At a glance
Figures checked 1 Sep 2026
What to take away
- Compare total monthly cost of ownership, not the mortgage payment against the rent.
- Transaction costs mean short stays usually favour renting.
- The deposit has an opportunity cost that belongs in the comparison.
| Cost | Typical annual |
|---|---|
| Property tax | 0.5%–2.5% of value, varies widely by state |
| Homeowners insurance | $1,800–$2,600 |
| Maintenance | 1%–2% of value |
| HOA dues, where applicable | $0–$6,000 |
| Transaction costs on sale | 6%–9% of price |
The break-even period
Buying and selling costs roughly eight percent of the price in total. Recovering that through appreciation and principal paydown typically takes several years, which is why a stay shorter than about five years usually favours renting.
The deposit’s opportunity cost
$84,000 as a down payment is $84,000 not invested. A complete comparison counts the foregone return on that capital alongside the equity being built.
The non-financial side is real and legitimate. Stability, control over the space, and freedom from a landlord have value that no spreadsheet captures.
Common questions
No more than mortgage interest, property tax, insurance and maintenance are. Only the principal portion of a mortgage builds equity.