At year 30
Net worth if you cash out that year
What the market actually did
Every year you could have bought
Same house, same rent, same horizon — only the year you signed changes. Click a bar to run that year. The height of it is sequence risk, and it is not small.
Year by year
| Year | S&P | Rate | Home value | Loan balance | Equity | Own /mo | Rent /mo | Difference | Buy net worth | Rent net worth | Gap |
|---|
How both sides are scored
Buy is the home's value minus what's left on the mortgage minus what it costs to sell — plus anything the owner invested in months where owning was cheaper than renting.
Rent & invest is the portfolio: the down payment and closing costs on day one, plus every monthly dollar owning would have cost above the rent, compounding at your assumed return.
Same yardstick both sides — cash in hand if you liquidated. Neither path gets credit for money it hasn't actually got.
What's modeled
A real month-by-month amortization schedule. PMI drops off the month equity crosses 20% of the home's current value. Property tax and maintenance track the home's value as it appreciates; insurance and HOA grow with cost inflation; rent grows on its own curve.
Investment tax drag comes off the return every year — 0.5 points is a reasonable stand-in for the tax on dividends and rebalancing in a taxable brokerage account.
What isn't — read this before you trust it
No mortgage interest deduction. Most filers take the standard deduction and get nothing from it; if you'd itemize, buying does a little better than shown here.
No capital gains tax on the sale. A primary residence is largely exempt (§121); the renter's portfolio isn't, and the tax drag only approximates that. The renter's side is the slightly optimistic one on the way out.
No transaction costs on the buy side beyond closing and selling, no rent-side insurance, no moving costs, no vacancy. And in the default mode, no volatility — both returns are smooth, and reality is not. That is what the backtest is for.
What the backtest does — and what it still doesn't
Each year of the run takes that calendar year's real S&P 500 total return (dividends reinvested), and the loan is written at the 30-year fixed rate actually on offer when you signed. Inflation is the real CPI for the year, so your rent-growth and appreciation assumptions carry as spreads over inflation — a 13% mortgage and a 32% stock return only belong in the same run if 1980's 13% inflation comes with them.
The house never crashes. There's no home-price index here, so 2008 hits the portfolio and not the house — which tilts the backtest toward buying. And your price and rent are today's: nobody paid 15× annual rent for a house at a 16% mortgage, so an old window punishes the buyer partly for a trade that was never on the menu. Turn off borrow at that year's rate to see the market sequence on its own.