Rent or buy a $350k home with 10% down?
On a $350,000 home with 10% down, buying beats renting over 10 years only if the same home would rent for more than about $1,774 a month. Below that, renting and investing the difference comes out ahead. Owning costs about $2,458 a month before maintenance, you put $35,000 down plus $10,500 in closing costs, and selling later costs about $21,000.
Most rent-against-buy answers are a verdict. This one is a threshold, because the decision turns almost entirely on one number that no national assumption can tell you: what the same home actually rents for where you live. Over 10 years, on these figures, that number is about $1,774 a month. Above it, buy. Below it, renting and investing the difference wins.
Owning this home costs roughly $2,458 a month before a single repair: $1,991 of mortgage at 6.50%, about $350 of property tax and $117 of insurance. Only the principal part of that payment becomes equity, and early in a mortgage that part is small.
The comparison is even-handed in a way most are not, and that is why the threshold lands where it does. The renter invests the $35,000 deposit and the $10,500 of closing costs rather than leaving them in cash, and invests the difference in every year that owning costs more, at the same 7% used everywhere else on this site. A comparison that lets the owner compound and the renter sit in cash is not a comparison.
That single choice is what most calculators get wrong, and it is worth being blunt about the size of it. With the deposit invested, the gap between a 7% portfolio and a home appreciating at 3% does an enormous amount of work over a decade. It is why the honest threshold sits well above $1,575, the rent a landlord would typically charge on a home at this price, and why buying is a closer call than it is usually presented as.
What moves the threshold. A lower mortgage rate moves it down sharply, which is why the same decision had a different answer a few years ago. A longer hold moves it down, because the one-off costs at both ends are spread further. Faster home appreciation moves it down; a higher return on the renter's investments moves it up. And rent growth above 3% a year moves it down, because a mortgage payment is fixed and rent is not.
What this excludes, and the first one favours buying. MAINTENANCE, which is real money and is not modelled here at all: a common rule of thumb is 1% of value a year, roughly $3,500 on this home, and including it would push the threshold higher still. The mortgage interest deduction, which helps only if you itemise. PMI below 20% down. And everything that is not financial, which for a home is most of the reason people buy one: security of tenure, the freedom to change the place, and the freedom to leave.
Monthly rent for the same home vs outcome
The same question at every monthly rent for the same home, so you can use the one you believe.
| Monthly rent for the same home | Which is ahead after 10 years |
|---|---|
| $1,064 | renting ahead by $132,823 |
| $1,419 | renting ahead by $66,448 |
| $1,774the tipping point | renting ahead by $74 |
| $2,129 | buying ahead by $61,957 |
| $2,484 | buying ahead by $85,598 |
Both sides invest what they do not spend, at 7%, so neither is quietly favoured. Uses a 6.50% mortgage over 30 years, 3% appreciation, 3% rent growth and 6% selling costs. Excludes maintenance, the mortgage interest deduction and PMI below 20% down.
Assumptions
- Home Price
- 350000
- Down Payment Percent
- 10
- Down Payment
- 35000
- Closing Costs
- 10500
- Monthly Mortgage
- 1991
- Monthly Carrying Cost
- 2458
- Selling Costs
- 21000
- Break Even Monthly Rent
- 1774
- Holding Period Years
- 10 yr
Frequently asked
Is it better to rent or buy a $350k home?
Over 10 years, buying wins only if renting the same home would cost more than about $1,774 a month. Below that, renting and investing the deposit comes out ahead on these assumptions.
Why is this threshold higher than other calculators say?
Because the renter here invests the $35,000 deposit and the $10,500 of closing costs, and invests the monthly difference too. Many comparisons leave that money in cash, which quietly hands the result to buying before any arithmetic happens.
What does owning actually cost each month?
About $2,458 before maintenance: $1,991 of mortgage, $350 of property tax and $117 of insurance. Only part of the mortgage payment builds equity, and early on that part is small.
How much does the mortgage rate matter?
More than almost anything else. At 6.50% a large share of every early payment is interest rather than equity, so a lower rate moves the threshold down sharply and makes buying easier to justify at the same price.
Does staying longer change the answer?
Yes. The costs of buying and selling, about $10,500 and $21,000 here, are one-off and are spread over however long you stay, so a longer hold lowers the rent at which buying wins.
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