About this model
This is a month-by-month rent-versus-buy simulation. It is not a payment comparison and not a mortgage calculator with a rent field bolted on. It runs two households side by side for the whole horizon under one rule — they spend the same total every month, and whoever has the cheaper month invests the difference.
What it models that most calculators do not
- PMI with a real cancellation threshold, measured as loan-to-value against the original price.
- Property tax, insurance, and maintenance that can be linked to the home’s current value rather than held flat.
- A floor on those value-linked costs, so a price crash cannot drive a homeowner’s carrying costs to zero.
- Extra principal payments, including the early payoff, the reduced interest, the earlier end of PMI, and the drop in monthly outlay once the loan is gone.
- Selling costs at the horizon, so the buyer is scored on what they would actually walk away with.
How it is checked
The simulation asserts its own invariants and refuses to report a result if any of them break: every dollar of the loan is either repaid or still owed, a fixed-rate loan is gone at scheduled payoff, and the two households’ lifetime spending never diverges. A comparison that quietly hands one side more money than the other is worse than no comparison, so those checks are enforced rather than assumed.
What it deliberately leaves out
Income tax, investment tax, moving friction, rent control, lumpy maintenance, and the value of flexibility. The main page explains each omission and why it matters.
Assumptions are yours
Investment return, home appreciation, and rent growth are the three inputs that dominate the answer, and all three are unknowable. Use the model to find out how much your assumptions matter — not to predict what will happen.