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A five-year rent-versus-buy comparison needs its assumptions

Comparing rent with a mortgage payment is a useful beginning. A fair five-year comparison also includes upfront cash, ownership costs, remaining debt and what happens to the renter's savings.

By Eric Hamilton · Published October 6, 2026

Originally uploaded August 13, 2026 · 1:36 · Watch on YouTube

Written companion added October 6, 2026. Adapted from Eric’s video captions with source checks; not a word for word transcript. The recording retains its original date.

Check the rent calculation

The clip compares $3,500 rent with about $3,800 to own a $450,000 home. Flat rent of $3,500 for 60 months totals $210,000. Reaching more than $220,000 requires rent increases or other costs that must be stated.

Separate equity from new profit

The cited $120,000 potential equity cannot be verified from the short alone. Equity can include the original down payment, principal repaid and assumed appreciation. It is not all a return created by spending $300 more monthly.

Give both options the same finish line

Include maintenance, taxes, insurance, purchase and sale costs, and the cash available to a renter. Test flat or falling home values as well as growth. Neither renting nor buying wins for every household.

Is the $120,000 equity guaranteed?

No. The short does not provide enough assumptions to reproduce it.

Does renting mean having no wealth?

No. Renters may hold savings and investments outside a home.

Sources and scope

Published August 13, 2026. The client scenario is Eric's account, with incomplete calculation assumptions in this excerpt. It is not a documented result or current quote.

  1. CFPB: Renting, buying and testing economic assumptions Accessed October 6, 2026
  2. CFPB: Principal repayment and home equity Accessed October 6, 2026

General education, not a loan quote, approval or an individual recommendation. Ask the appropriate professional about your situation.

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