How This Calculator Works & Financial Methodology
Buying a home builds equity through principal paydown and property appreciation, but incurs unrecoverable costs (mortgage interest, property tax, maintenance, and buying/selling closing fees) plus the opportunity cost of locking up your down payment. This model simulates both paths year-by-year to pinpoint the exact breakeven horizon.
Net Worth Opportunity Cost Model
Buyer Net Worth = Home Value(t) − Selling Costs − Remaining Mortgage; Renter Net Worth = Invested Down Payment + Compounded Monthly Cash-Flow Savings