Move vs improve
Outflow parity: both paths start with the same cash, and the cheaper one invests the difference.
Crossing point
Computed
The house
Commission, transfer taxes and concessions. It is charged on the way out, not the way in.
The alternative
The rent for the house you would otherwise buy.
After tax, on the capital both paths start with.
Drives the itemisation test and the SALT phase-down.
Filing status
Two portfolios, one axis
Owning Renting
| Year | Owner | Renter | Gap |
|---|---|---|---|
| Year 3 | $60k | $108k | −$48k |
| Year 5 | $94k | $144k | −$50k |
| Year 7 | $132k | $181k | −$49k |
| Year 10 | $195k | $236k | −$41k |
Owner wealth is the house net of selling costs and the mortgage balance, plus the portfolio. Renter wealth is the portfolio alone.
Break-even by assumption
| Growth | 4% return | 6% return | 8% return |
|---|---|---|---|
| 1.0% | Y15 | — | — |
| 1.7% | Y12 | — | — |
| 2.3% | Y9 | Y12 | — |
A dash means the crossing is outside the horizon. A single break-even year in a 7% rate market would be false precision; nine of them show how much the answer moves.
Maintenance is $4,175 a year, carried on the owner side. The tax shield is modelled from the itemisation test, not assumed away.
A buyer commits a down payment and closing costs. A renter who is comparing honestly invests an identical sum on day one, and whichever path is cheaper each month invests the difference. Comparing a mortgage payment to a rent cheque instead is how calculators end up recommending a purchase that loses money.
At the 2026 SALT cap of $40,400, a buyer at the median price with a 7.32% loan itemises and gets a real shield. Leaving it out would bias every answer against buying, so the engine runs the itemisation test each year against the interest actually paid.
The crossing year moves by half a decade when appreciation moves by one point. The grid shows nine combinations, because a single number in a market like this one is false precision wearing a confident face.
W_own(t) = V0(1+g)^t × (1 − C_sell) − B(t) + S_owner(t)
W_rent(t) = S_rent(t)
break-even = min t where W_own(t) − W_rent(t) > 0
S_owner, S_rent = portfolios fed by the monthly outflow difference
Tax treatment is modelled, not advised. The marginal rate, the itemisation test and the SALT phase-down are computed from the figures you enter; a tax preparer is still the authority on your return.