Rent vs buy a $400k house
Over 30 years, buying a $400k home comes out about $239,968 ahead — comparing buying (20% down, $80,000) against renting at $2,000/month and investing the down payment plus any monthly savings. Both paths start with the same money; the difference is where it goes.
Net worth over time: rent vs buy
Both start at age 30 with enough for the $80,000 down payment. The renter invests it (and any monthly difference) at 7%; the buyer puts it into a $400k home appreciating 3%/yr with a 30-year mortgage. In today's dollars:
| Age | Rent & invest | Buy |
|---|---|---|
| 30 | $110,549 | $106,314 |
| 35 | $267,546 | $293,305 |
| 40 | $455,502 | $511,893 |
| 45 | $680,519 | $769,778 |
| 50 | $948,430 | $1,076,715 |
| 55 | $1,266,871 | $1,441,486 |
| 60 | $1,646,413 | $1,886,381 |
What actually drives the answer
Rent vs buy is rarely about "throwing money away on rent." It hinges on a handful of levers this projection captures:
- Price-to-rent ratio. Here a $400k home is compared to $2,000/month rent. Where rent is cheap relative to prices, renting-and-investing can win; where buying is cheap relative to rent, owning pulls ahead.
- How long you stay. Buying carries big upfront costs (down payment, closing) that take years to earn back. The crossover in this scenario is around age 31. Move sooner and renting often wins.
- The invested difference. Renting only wins if you actually invest the down payment and monthly savings — not spend them. This model assumes you do.
The same comparison at every price point
The answer is driven far more by the price-to-rent ratio than by the price tag itself — hold that ratio fixed (rent at 0.5% of price per month, the national-ish average) and buying ends ahead at every price in the table. Each row is its own 30-year projection, not a scaling of the one above:
| Home price | Rent assumed | Buy ends | Rent & invest ends | Ahead by |
|---|---|---|---|---|
| $200k | $1,000/mo | $1,591,115 | $1,529,375 | Buy +$61,740 |
| $250k | $1,250/mo | $1,490,555 | $1,393,198 | Buy +$97,357 |
| $275k | $1,400/mo | $1,441,419 | $1,308,343 | Buy +$133,075 |
| $300k | $1,500/mo | $1,512,355 | $1,374,082 | Buy +$138,273 |
| $325k | $1,650/mo | $1,604,431 | $1,425,680 | Buy +$178,751 |
| $350k | $1,750/mo | $1,697,662 | $1,510,581 | Buy +$187,082 |
| $375k | $1,900/mo | $1,791,706 | $1,561,890 | Buy +$229,816 |
| $400k this page | $2,000/mo | $1,886,381 | $1,646,413 | Buy +$239,968 |
| $450k | $2,250/mo | $2,092,112 | $1,792,920 | Buy +$299,192 |
| $500k | $2,500/mo | $2,270,835 | $1,911,904 | Buy +$358,931 |
| $550k | $2,750/mo | $2,449,203 | $2,030,304 | Buy +$418,899 |
| $600k | $3,000/mo | $2,625,978 | $2,148,010 | Buy +$477,968 |
| $650k | $3,250/mo | $2,819,184 | $2,283,607 | Buy +$535,578 |
| $700k | $3,500/mo | $3,013,573 | $2,420,500 | Buy +$593,073 |
| $750k | $3,750/mo | $3,229,363 | $2,578,291 | Buy +$651,073 |
| $850k | $4,250/mo | $3,648,626 | $2,817,528 | Buy +$831,098 |
| $900k | $4,500/mo | $3,824,641 | $2,920,051 | Buy +$904,590 |
| $1M | $5,000/mo | $4,161,264 | $3,119,341 | Buy +$1,041,922 |
Can you afford it in the first place?
This page assumes both paths start with the 20% down payment in hand. The affordability pages ask the prior question — whether a $400k house is funded and carried on a given salary with 10% down and PMI, and what it does to the retirement age: on a salary of $80k · $100k · $150k.
Assumptions: 20% down, 6.5% mortgage, 30-yr term, 3% home appreciation, 1.1% property tax, 7% investment return, 3% inflation, single filer, no-income-tax state. Your local prices, rent, and how long you'll stay change the answer — model yours in the calculator.
The bills that outlive the mortgage
A mortgage eventually ends; the other costs of ownership do not. Property taxes, homeowners insurance, and any HOA dues are permanent, and on a mid-priced home they add up to a meaningful monthly sum on their own — a payment you keep making long after the loan is paid off.
They also tend to move in one direction. Assessed values are revised upward, insurance premiums climb with rebuilding costs and local risk, and HOA dues rise to cover the association's own inflation. None of it builds equity; it is the recurring price of holding the asset. A useful way to think about it: even a paid-off house still carries a floor of taxes, insurance, and dues that functions like a smaller, permanent rent.
For the rent-versus-buy comparison, these belong in the owner's column every year, not just at purchase. A low headline mortgage payment can look like a clear win until this trio is added back, at which point the monthly gap between renting and owning is often narrower than it first appears.
Common questions
Is it better to rent or buy a $400k house?
Over 30 years in this projection, buying comes out about $239,968 ahead — buying ends around $1,886,381 vs renting-and-investing around $1,646,413. It flips based on how long you stay, local price-to-rent, and whether you actually invest the difference.
How much do you need to buy a $400k house?
A 20% down payment is about $80,000, plus closing costs. Less than 20% down usually adds PMI. Renting frees that cash to invest instead — which is the core of the trade-off.
Does renting really mean throwing money away?
No. Rent buys housing without the costs of ownership (property tax, maintenance, transaction costs), and the down payment can be invested. Buying builds equity but ties up cash and assumes appreciation. Neither is automatically "throwing money away."