Buy
$263,283
Net Sale Proceeds: $263,283
Is It Better to Rent or Buy a $200,000 Home?
Buying at $200,000 costs $1,529 a month against $1,500 to rent. After 10 years Buying is ahead by $66,627.
A $200,000 home with 20% down means $46,000 up front and $1,529 a month once taxes, insurance, HOA and maintenance are counted — against $1,500 a month to rent something comparable. Renting starts out $1 cheaper each month, and that difference is real money the renter can invest instead.
Over 10 years the picture changes: the owner builds equity while the renter faces rising rent. On these assumptions Buying comes out ahead by $66,627, and buying pulls ahead from year 4 onward. The calculator below is set to this scenario — change the rent, the rate or how long you plan to stay, since that last one decides it more than anything else.
Results
Net Worth Advantage
$75,570
Renting wins · over 10 years
Decision Summary
Rent
$338,853
Renter Investment Value: $338,853
Cash Needed to Buy
$103,500
Monthly P&I: $2,275
Initial Monthly Gap
+$1,272
Renting starts cheaper
Break-even Year
Not reached
First year buying net worth catches renting
Final Net Worth Comparison
$263,283
$338,853
Buy
Rent
Net Worth Timeline
Decision Summary
- Buy Net Worth
- $263,283
- Rent Net Worth
- $338,853
- Net Worth Advantage
- $75,570
- Final Home Value
- $604,762
- Net Sale Proceeds
- $263,283
Buying Breakdown
- Total Buy Cash Outflow
- $581,206
- Total Interest
- $218,247
- Total Property Tax
- $62,906
- Total Maintenance
- $52,422
- Total PMI
- $0
- Selling Costs
- $36,286
Renting & Investing
- Total Rent Cash Outflow
- $310,969
- Total Rent
- $306,786
- Total Renter Insurance
- $4,183
- Renter Investment Value
- $338,853
- Buyer Surplus Investment
- $0
Renting vs buying a $200,000 home — net worth by year
At 6.5% over 30 years with 20% down, versus $1,500 a month rent. Both sides invest what they do not spend, at 5% a year.
| If you stay | Buying net worth | Renting net worth | Ahead |
|---|---|---|---|
| 3 years | $52,988 | $53,251 | Renting |
| 5 years | $73,516 | $58,709 | Buying |
| 7 years | $97,626 | $64,727 | Buying |
| 10 years | $141,556 | $74,929 | Buying |
| 15 years | $240,233 | $95,631 | Buying |
| 20 years | $380,300 | $122,052 | Buying |
Frequently Asked Questions
- Month to month, renting: $1,500 against $1,529 to own, a gap of $1. Over time that reverses, because rent rises while a fixed mortgage payment does not, and part of every payment buys equity. On these assumptions Buying is ahead after 10 years by $66,627.
- On these assumptions, about 4 years. Buying carries about $6,000 in closing costs and roughly $16,127 in selling costs at this price, so a short stay never recovers them. This is why the "should I buy" question is really "how long am I staying".
- Lenders generally want housing costs under 28% of gross income, which at $1,529 a month means about $65,523 a year. You also need $46,000 in cash for the down payment and closing costs. Renting needs no down payment, which is the other half of the trade-off.
- A 6.5% mortgage over 30 years, 20% down, 1.2% property tax, no HOA, 1% of value a year in maintenance, 3% home appreciation, 3% rent increases and 5% returns on invested cash. The $1,500 rent reflects the price-to-rent ratio typical of markets at this price — cheaper metros rent high relative to prices, expensive ones rent low. Change any of it in the calculator; appreciation and how long you stay move the answer most.
Rent vs buy by home price
Home prices