What rent makes buying worth it?
At a 6.5% mortgage, buying a $420,000 home beats renting only when a comparable rental costs more than $2,468 a month — about 0.59% of the home's value. Below that threshold, renting and investing the difference builds more wealth over a 10-year stay. The threshold at every rate:
| Mortgage rate | Buying wins above (rent/mo) | As % of home value | As price-to-rent ratio |
|---|---|---|---|
| 4% | $1,890 | 0.45% | 18.5 |
| 4.5% | $2,003 | 0.48% | 17.5 |
| 5% | $2,117 | 0.50% | 16.5 |
| 5.5% | $2,233 | 0.53% | 15.7 |
| 6% | $2,350 | 0.56% | 14.9 |
| 6.5% | $2,468 | 0.59% | 14.2 |
| 7% | $2,587 | 0.62% | 13.5 |
| 7.5% | $2,708 | 0.64% | 12.9 |
| 8% | $2,829 | 0.67% | 12.4 |
Read it as: the cheaper the money, the lower the rent that justifies buying. Each row is a full month-by-month simulation of the default scenario below with only the rate changed.
Who wins the default 2026 scenario?
Renting wins by about $67,000 over 10 years. The scenario: a $420,000 home versus a $2,100 comparable rental, 20% down at 6.5%, both sides investing whatever they don't spend, measured on ending net worth after selling costs and taxes on both sides.
The same scenario at a 4% mortgage flips: buying wins by about $38,000, breaking even in year 6. The rate, not the slogan, decides the answer.
How does the mortgage rate change the answer?
On the default scenario, here is the verdict and the ending net-worth gap at each rate — same home, same rent, same 10-year stay:
| Mortgage rate | Verdict | Net-worth gap after 10 years |
|---|---|---|
| 4% | Buying wins | $38,000 |
| 4.5% | Buying wins | $18,000 |
| 5% | Renting wins | $3,000 |
| 5.5% | Renting wins | $24,000 |
| 6% | Renting wins | $46,000 |
| 6.5% | Renting wins | $67,000 |
| 7% | Renting wins | $89,000 |
| 7.5% | Renting wins | $111,000 |
| 8% | Renting wins | $134,000 |
What assumptions produce these numbers?
Every figure above assumes: $420,000 home price, $2,100 monthly rent, 20% down, a 30-year fixed mortgage, 3% annual home appreciation, % annual rent growth, 7% nominal investment return, a 10-year stay, US 2026 tax rules with the standard deduction, PMI below 20% equity with automatic termination, and full buying and selling costs. Change any of them for your own case in the calculator — every input is adjustable and every scenario is a shareable URL.
Where do these numbers come from?
From an open-source simulation engine (MIT-licensed) that models both paths month by month and is covered by 146 automated tests, including 10 verification scenarios computed by hand independently of the code. Every formula is documented on the methodology page. This page renders from that engine at build time — the numbers here cannot disagree with the calculator, because they are the calculator.