Rent vs buy a $450k house
Over 30 years, buying a $450k home comes out about $234,098 ahead — comparing buying (20% down, $90,000) against renting at $2,250/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 $90,000 down payment. The renter invests it (and any monthly difference) at 7%; the buyer puts it into a $450k home appreciating 3%/yr with a 30-year mortgage. In today's dollars:
| Age | Rent & invest | Buy |
|---|---|---|
| 30 | $117,288 | $114,496 |
| 35 | $289,355 | $311,594 |
| 40 | $497,531 | $548,412 |
| 45 | $749,388 | $833,435 |
| 50 | $1,053,562 | $1,176,370 |
| 55 | $1,420,780 | $1,589,207 |
| 60 | $1,864,380 | $2,098,478 |
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 $450k home is compared to $2,250/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.
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.
What the down payment could have earned elsewhere
The larger the home, the larger the down payment, and that lump of cash has a cost beyond the check you write. Parked in the house, it stops being available to compound in a diversified portfolio — and as the purchase price climbs, so does the amount of capital locked behind the front door and the growth it forgoes.
This opportunity cost is easy to overlook because it never arrives as a bill. There is no monthly statement for the returns a down payment might have earned had it stayed invested. Yet on a mid-priced home the sum is large enough that its foregone growth can rival several of the more visible ownership costs combined.
Home equity is also illiquid: short of selling or borrowing against it, the money is hard to reach in an emergency. That does not make buying wrong — a home delivers shelter and a hedge against rising rents that a brokerage balance does not. It simply means the true cost of buying includes what the down payment quietly gives up.
Common questions
Is it better to rent or buy a $450k house?
Over 30 years in this projection, buying comes out about $234,098 ahead — buying ends around $2,098,478 vs renting-and-investing around $1,864,380. 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 $450k house?
A 20% down payment is about $90,000, 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."