Rent vs Buy
Given the same capital, should you buy a home or rent and invest the down payment? This tool compares net wealth after N years, accounting for mortgage interest, property appreciation, rent growth, holding costs, and investment opportunity cost.
Inputs cover both sides: house price, down payment %, mortgage rate, holding cost %, price growth assumption on the buy side; monthly rent, rent growth, investment return on the rent side.
Excluded (for simplicity): transaction taxes and fees (deed tax, broker fees, land value tax), depreciation/maintenance variance, lifestyle flexibility value. Adjust the holding cost % to reflect your expected real costs.
Frequently asked
- Which inputs drive the rent-vs-buy outcome the most?
- Three: (1) home appreciation rate, (2) expected investment return, (3) rent growth. The first two largely determine the headline result — 7% investment vs 2% appreciation tilts toward renting; 5% appreciation vs 4% investment tilts toward buying. Rent growth shapes the trajectory: fast rent growth erodes the renting advantage over time.
- Why do I subtract holding costs on the buy side?
- Property management fees, land value tax, house tax, maintenance, fire/earthquake insurance — combined roughly 1-2% of home value annually. Over 30 years that's substantial. Renters don't pay these directly (they're embedded in rent), so the comparison must subtract them on the buy side.
- Can I really earn 7-9% by investing the down payment?
- Global equity indices have historically returned 7-10% nominal (dividends reinvested). Realizing it requires: (1) strict buy-and-hold without timing; (2) global diversification (VT or 0050+VTI); (3) not selling at the bottom. Most people realize materially lower returns due to emotional trading. A 5-6% input is more realistic for planning.
- How do I price the security and lifestyle of owning?
- The tool doesn't directly quantify it — that's subjective. Reverse the question: if the model says renting wins by NT$5M over 30 years, ask whether 30 years of housing stability, the freedom to renovate, and a sense of belonging are worth NT$5M to you. If yes, buying is the right (not 'cheaper') decision.
- What if I set home appreciation to 0%?
- Renting + investing usually wins. Paying 30 years of interest and holding costs for zero appreciation underperforms putting the same capital in equities. But Taiwanese long-term appreciation has averaged at or above inflation (1.5-2%), with Taipei and Hsinchu Science Park areas historically much higher (5-8%). Location matters enormously.
- Does the tool store my inputs?
- No. All math runs locally in your browser.