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Rent is not throwing money away. Interest is not building equity.
The honest comparison is not rent vs mortgage payment — it is total cost of each path, including closing costs, maintenance, selling costs, appreciation, and what the renter earns investing the down payment. This calculator simulates both year by year and finds the breakeven point where buying finally wins.
Anyone facing a move uses it to kill the "rent is throwing money away" argument with actual numbers — breakeven year included. Agents and lenders point clients at it because an honest comparison builds more trust than a sales pitch.
No — the first years of a mortgage are mostly interest, which is "thrown away" exactly like rent, plus closing and selling costs of 8–9% round trip. Buying wins over time through appreciation, principal paydown, and frozen housing costs while rent inflates. The crossover is typically 4–7 years; before that, renting is usually the cheaper path.
Appreciation. At 3% annual appreciation, buying a $400k home beats renting around year 5–7 in typical markets; at 1% it can push past year 10; at 5% it can arrive by year 3. Second most powerful: how long you stay. If you might move within 3 years, the transaction costs almost always make renting the winner.
Mathematically yes — it is the honest comparison — behaviorally, most renters do not. If you know you won't invest the down payment and monthly savings, buying acts as forced savings, which is worth something real. Run the calculator with a 0% investment return to see the "I won't invest it" scenario.