Finance Friend,

The decision to buy or rent a home is often treated more as a rite of passage rather than a capital allocation problem. Most people rely on 1990s intuition to navigate a 2026 market, which is a recipe for stalled net worth growth.

High-stakes financial decisions require a system that prioritizes math over gut feelings, so I built a free online calculator that solves the buy versus rent decision.

Why the conventional wisdom falls short

The "renting is throwing your money away" framing ignores two critical variables: opportunity cost and homeownership costs.

When you buy, you're not just paying a mortgage. You're locking capital into a down payment, paying property taxes, maintenance, insurance, and transaction costs. The implicit bet is that your home appreciates faster than alternative investments (and this certainly is not always true).

The answer isn't universal. It's contextual. And it requires real assumptions, not inherited wisdom.

Start with high-quality assumptions

The model is only as useful as the data you feed it.

There are three key inputs:

1. Current mortgage rates: I use Mortgage News Daily. It's updated constantly and reflects real lending conditions, not quarterly averages. Lenders use it themselves.
2. Home prices in your market: Run a Redfin search for sold homes. Filter by zip code, property type, and bedroom count. Export the results and calculate the median sale price. When I did this for my market, I found a $625,000 median based on 175 comps over 12 months.
3. Rental prices for comparable homes: Use Zillow's Rental Manager. Input your zip code, property type, and bedroom count. In my market, comparable rents run around $3,500/month.

These aren't hypotheticals. They're real comps from your actual market. Skip this step and the analysis becomes noise.

How the calculator models net worth impact

The tool compares buying vs renting based on estimated net worth over time. The recommendation is based solely on which path leaves you wealthier.

Net worth impact is defined as equity minus out-of-pocket costs. How much does your net worth grow on paper, minus how much cash are you effectively losing?

For buying, out-of-pocket costs include the down payment, mortgage payments, property taxes, insurance, maintenance, utilities, and closing costs. Equity builds through the down payment, principal paydown, and home appreciation.

For renting, out-of-pocket costs are rent, renter's insurance, and utilities. Equity builds by investing the down payment from day one and investing the monthly difference whenever renting costs less than owning.

The model assumes equal starting net worth in both scenarios. This keeps the comparison fair for someone managing their finances intentionally.

Year by year, the calculator shows how each path changes your net worth. You can see not just which option wins, but when one overtakes the other. At the end, whichever path has the higher net worth impact is the mathematical winner.

No lifestyle assumptions. No emotional preferences. Just the numbers.

AI as leverage

I initially tried modeling this directly in ChatGPT and Claude. They struggled with the multi-step logic and precision required.

So I learned to code a standalone calculator with AI assistance. I described what I wanted, iterated through errors, and debugged incrementally. No coding background required.

AI replaced hours of manual iteration and made it possible to build a reusable tool instead of a one-time analysis. The leverage isn't in the tool itself — it's in having a system you can rerun as your assumptions change.

This is what AI should do: compress decision cycles and reduce repetitive cognitive load.

What this calculator doesn't cover

This model is purely financial. It doesn't account for legitimate non-financial preferences — like wanting freedom from a landlord or avoiding maintenance responsibility.

Those considerations are valid. But they're subjective. My approach is to understand the math first, then layer in personal preferences with full visibility into the tradeoffs.

You can't make an informed decision if you don't know what the decision is actually costing you.

What to do with this

Explore the free online calculator. Run it with your market assumptions. Compare the net worth trajectories. Use it to sanity-check your current housing decision or revisit it when conditions change.

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Your support is incredibly helpful and motivating. Thank you!

In best regards,
Ben
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