Rent vs. buy

The two numbers that decide this

How long you'll stay, and what you'd do with the money otherwise. Everything else on this page is close to noise by comparison, so if you only change two fields, change those two.

Buying carries large one-time costs at both ends, roughly 2–5% to get in and 6–8% to get back out, and those have to be spread across however long you own the place. Stay two years and they swamp everything else in the model. Stay ten and they mostly disappear into the background. The breakeven in the Portland market usually lands somewhere between four and seven years, which is why the "how long will you stay" field moves the answer more than the interest rate does.

Why the investment return field matters

Most calculators quietly assume your down payment would have sat in a checking account earning nothing at all, and that isn't a fair comparison. If you'd invested $105,000 instead of putting it into a house, that money would plausibly have grown over the same stretch of years. Setting that return to 6% is a reasonable long-run assumption, and if you set it to 0% you'll watch buying win almost every time, which is exactly how the dishonest calculators are built.

What this doesn't capture

A fixed-rate mortgage freezes your principal and interest for thirty years while rent keeps climbing, and the model does capture that part. It does not capture the mortgage interest and property tax deduction, which only matters if you itemize. It also doesn't capture the fact that you can paint the walls any color you want, or that you can't pack up and leave in sixty days if the job changes. Those things are real, and they aren't dollars.

Common questions

Is 1% a year the right maintenance number?

It's a reasonable long-run average for Portland's older housing stock, and the thing to remember is that it arrives lumpy: nothing for four years, and then a roof. A 1920s Southeast Portland bungalow will run higher than that, and new construction will run lower for a while.

Doesn't buying always win eventually?

On most assumptions, yes, eventually. But the honest question is whether "eventually" arrives before you move. So if there's a real chance you relocate in three years, renting is very often the better financial decision, and I'll tell you that even though it costs me a loan.