Understanding the Charts

This is the most important chart in the calculator. It compares the total net worth of a buyer vs a renter at the end of each year.

Buyer's net worth = what you'd walk away with if you sold the home today. It includes: home value minus selling costs (agent commission, transfer tax, etc.) minus remaining mortgage balance, plus any tax savings invested in the market, plus any investment from monthly savings (when ownership costs less than rent).

Renter's net worth = the investment portfolio built from investing the down payment + closing costs upfront, plus the monthly savings when rent is cheaper than owning. This compounds monthly at your chosen investment return rate.

The point where the two lines cross is the break-even year — buying becomes the better financial choice after that point.

Key drivers: home appreciation rate, investment return rate, down payment size, mortgage rate, how long you stay, and selling costs.

Shows how the buyer's wealth builds over time, broken into components:

• Equity — Home value minus remaining mortgage. Grows as you pay down the loan and the home appreciates.
• Savings Investment — When your monthly ownership cost is lower than rent, the difference is invested in an index fund. This line shows that portfolio growing over time. Only appears when the buyer pays less than a renter.
• Loan Balance — Remaining mortgage balance, declining over time as you make payments.

If the Savings Investment line is large, it means owning is significantly cheaper per month than renting, and the buyer is investing the difference wisely.

Shows the renter's investment portfolio growing over time. The renter starts with the down payment and closing costs (money they didn't spend on a house) and invests it in the market.

Each month, if owning would cost more than renting, the renter invests the monthly difference too. The portfolio compounds at the investment return rate (default: S&P 500 historical average of ~10.2%).

The security deposit and moving overhead are deducted from the starting balance, and the deposit is returned at the end of the time horizon.

Key drivers: investment return rate, down payment amount, closing costs, monthly cost difference between owning and renting.

A side-by-side comparison of what you pay each month as a buyer vs a renter.

Buying monthly cost includes: mortgage payment (principal + interest), property tax, homeowner's insurance, maintenance, HOA fees, PMI (if applicable), and maintenance shocks — minus any tax deduction savings.

Renting monthly cost is simply the monthly rent, which grows at the rent increase rate each year.

With a fixed-rate mortgage, the mortgage payment stays flat. Property tax, insurance, maintenance, and HOA grow with inflation. Rent also grows — typically at 3-4% per year. Over a long time horizon, the buyer's monthly cost often becomes lower than rent, and the buyer invests the savings.

A stacked bar chart showing exactly where your ownership dollars go each month in the final year:

• Principal — Goes toward paying off the loan (builds equity).
• Interest — Cost of borrowing. Starts high, decreases over time as the loan balance drops.
• Property Tax — Annual tax based on your home's assessed value, shown monthly.
• Insurance — Homeowner's insurance premium.
• Maintenance — Regular upkeep costs (typically 1% of home price per year).
• HOA — Monthly fees for shared amenities/maintenance in a community.
• PMI — Private mortgage insurance, required when down payment is under 20%. Drops off once you hit 20% equity.

Compares the cumulative money "lost" by both buying and renting — costs that don't build equity or grow investments.

Buying sunk costs: closing costs, mortgage interest, property tax, insurance, maintenance, HOA, PMI, and maintenance shocks — minus tax deduction savings.

Renting sunk costs: total rent paid plus moving overhead. Every dollar of rent is a sunk cost since none goes toward building an asset.

A common misconception is that "rent is throwing money away." This chart shows that buying also has significant sunk costs. The question is which path builds more wealth net of those costs.

Breaks down the buyer's cumulative sunk costs into individual categories over time:

• Interest — The largest component early on. With a 30-year mortgage, roughly 60-70% of early payments go to interest.
• Property Tax — Grows slowly with inflation.
• Insurance & Maintenance — Steady costs that grow with inflation.
• HOA — Fixed monthly fees that grow with inflation.
• PMI — Only present when equity is below 20%. Disappears once you reach that threshold.
• Maintenance Shocks — Major repairs (roof, HVAC, etc.) spread evenly across the time horizon.
• Tax Savings — Shown as a negative (reduction) if you itemize deductions. Offsets some of the interest and property tax costs.

Shows the tax benefits of homeownership over time:

• Annual Savings (bars) — How much you save each year by itemizing mortgage interest and SALT deductions vs taking the standard deduction.
• Cumulative Savings (green area) — Running total of tax savings.
• Invested Value (blue area) — What those savings grow to when invested in an index fund at your investment return rate. This is included in the buyer's net worth.

Tax savings only apply when your itemized deductions (mortgage interest + state/local taxes + other deductions) exceed the standard deduction ($14,600 single / $29,200 married for 2024). In early years of a mortgage, interest is highest, so tax benefits are usually largest then.

When "Invest Tax Savings" is enabled (default), the annual savings are invested and compounded. The invested value can significantly exceed the raw cumulative savings over time.

Projects your net worth after you move out, comparing two exit strategies:

• Sell & Invest — You sell the home, take the net proceeds (sale price minus selling costs minus remaining loan), combine it with your tax savings investment and monthly savings investment, then invest everything in the market.
• Rent It Out — You keep the property and rent it out. Net worth = property value minus remaining mortgage plus accumulated rental cash flow invested in the market. Rental expenses (management, vacancy, maintenance, taxes, insurance, mortgage) are deducted from gross rent.

Selling and investing usually wins if investment returns exceed rental yield. Renting out wins if the property appreciates strongly and generates positive cash flow.

Instead of a single deterministic outcome, this chart runs 1,000 simulations with randomized market conditions to show the range of possible outcomes.

Each simulation randomly varies three inputs each year:

• Investment returns — centered on your chosen rate with ~15% annual volatility (reflecting stock market swings).
• Home appreciation — centered on your chosen rate with ~4% annual volatility.
• Rent growth — centered on your chosen rate with ~2% annual volatility.

The chart shows fan bands:

• P10–P90 (outer band) — 80% of outcomes fall within this range.
• P25–P75 (inner band) — 50% of outcomes fall here.
• P50 (median line) — The middle outcome.

The summary stats below show: probability that buying wins, median net worth difference, and best/worst case scenarios. A seed value ensures results are reproducible.