Consider your timeline
If you plan to move within 5 years, renting often makes more financial sense due to closing costs and market volatility.
Factor in opportunity cost
Consider what you could earn by investing your down payment instead of using it to buy property.
Don't forget hidden costs
Homeownership includes maintenance, property taxes, and insurance that can add 2-4% of home value annually.
$100k - $2.5M
5% - 100%
$500 - $10k
Breakeven Horizon
After 3 years, your total cost of homeownership (down payment, mortgage, taxes, etc.) for a $500,000 home would be $220,929. Your total cost to rent would be $92,727. Renting leaves you with $128,202 in your pocket (including the money you didn't spend on a down payment).
BUY
$220,929
RENT
$92,727
RENT GAIN
$128,202
After 3 years, if you buy, your home will have $170,048 in equity (available to you when you sell). However, if you instead rent and invest your down payment and the other money you save, at a 6% return rate it will earn around $36,640 in 3 years.
Home Equity (Buy)
$170,048
Your stake in the home
Investment Returns (Rent)
$136,640
Down payment + savings invested
Looking at your gross costs, equity and investment potential, it's better for you to rent than buy if you plan to live in your home more than 5 years.