Methodology

1. Core comparison target

The primary comparison is terminal net worth at your selected stay horizon. We calculate a buy terminal net and a rent terminal net, then compare the difference.

2. Buy path model

Buying includes upfront and ongoing ownership cash flows, including:

• Down payment and buy closing costs
• Mortgage principal and interest
• Property tax, insurance, HOA, maintenance, and PMI (if applicable)
• Selling costs at the chosen horizon

At the horizon, home value and remaining loan balance determine equity and estimated net sale proceeds.

3. Rent path model

The renter path assumes:

• Monthly rent outflows growing at your rent growth rate
• Initial investable capital equal to buy upfront cash (down payment + buy closing costs)
• Monthly cash-flow differences added to (or withdrawn from) the renter portfolio
• Portfolio growth at your investment return assumption

The model does not allow the renter investment balance to go below zero.

4. Break-even definition

Break-even is the first simulated month where buy net cost becomes lower than rent net cost. If that crossing does not happen by your horizon, the app reports no break-even by that year.

5. Time horizon and granularity

The simulation runs monthly and aggregates annual views for charting. Stay horizon can be fractional years, and horizon outputs are captured at the corresponding month.

6. Important limitations

• No tax filing optimization, deductions, or jurisdiction-specific tax treatment
• No refinancing, recasting, ARM resets, or lender-specific underwriting constraints
• No stochastic volatility modeling; assumptions are deterministic
• No legal or financial advisory interpretation

7. Practical use

Use this calculator for directional planning, then validate decisions with local tax rules, real lender quotes, and your own risk tolerance.