Rent vs. Buy Algorithm.
Most calculators ignore the stock market. We don't. We weigh the potential growth of your downpayment against the benefits of home equity.
Rent vs. Buy Algorithm
Opportunity Audit: Weighing the stock market against home equity.
Buying
Equity PathTotal Monthly Cost
$0
Net Wealth Effect
$0
Appreciation minus total ownership costs.
Renting
Market PathTotal Monthly Cost
$0
Net Wealth Effect
$0
Downpayment growth at 8.0%.
Algorithm Verdict
Buying Wins.
Based on your interest rate and stock market assumptions, buying generates more net wealth.
30yr Wealth Gap
$0
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The "Opportunity Cost" of a Downpayment
If you put $100,000 down on a house, that money is no longer earning 8% to 10% in a broad market index fund. Over 30 years, that $100,000 in the S&P 500 would mathematically grow to nearly $1.7 Million.
For homeownership to "win," the appreciation of the property plus the savings from not paying rent must exceed that massive $1.7M opportunity cost. In many high-cost-of-living (HCOL) areas, the math suggests renting and investing the difference is actually the superior wealth-building path.
2026 Market Assumptions
- 01
Mortgage Rates: Assuming a prevailing rate of 6.2% – 6.8% for 30-year fixed conforming loans.
- 02
Appreciation: Conservative 3.0% national annual average for residential real estate.
- 03
Maintenance: The standard 1% of home value per year is deducted for repairs, insurance, and taxes.
Secure Your Downpayment Yield
While you're waiting for the right market, your downpayment shouldn't sit idle. Earn a top-tier APY with SoFi and get your money working before you even find your next home.
Partner: SoFi