Rent vs buy a $600k house
Over 30 years, buying a $600k home comes out about $342,364 ahead — comparing buying (20% down, $120,000) against renting at $3,000/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 $120,000 down payment. The renter invests it (and any monthly difference) at 7%; the buyer puts it into a $600k home appreciating 3%/yr with a 30-year mortgage. In today's dollars:
| Age | Rent & invest | Buy |
|---|---|---|
| 30 | $152,295 | $149,092 |
| 35 | $358,765 | $391,856 |
| 40 | $607,949 | $682,761 |
| 45 | $908,368 | $1,031,673 |
| 50 | $1,270,918 | $1,451,074 |
| 55 | $1,708,762 | $1,955,999 |
| 60 | $2,237,811 | $2,580,175 |
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 $600k home is compared to $3,000/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.
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.
Let the price-to-rent ratio frame the decision
When a home costs more, the most clarifying number is often the price-to-rent ratio — the purchase price divided by a full year's rent for a comparable place. A high ratio means buying is expensive relative to renting the same home, which tilts the math toward renting; a low ratio tilts it toward owning. Pricier houses in costly markets frequently carry high ratios, and that is worth weighing before assuming a bigger purchase is the better deal.
The ratio is a starting frame, not a verdict, because it leaves out a force that pulls the other way over time. A fixed mortgage is an inflation hedge: the principal-and-interest payment is frozen while rents tend to climb year after year, so the longer you stay, the more owning benefits from a payment that stands still.
So the priciest homes reward the longest horizons. A high price-to-rent ratio argues for renting when the stay is short, while a long, settled tenure lets a frozen mortgage and rising rents gradually flip the advantage toward owning.
Common questions
Is it better to rent or buy a $600k house?
Over 30 years in this projection, buying comes out about $342,364 ahead — buying ends around $2,580,175 vs renting-and-investing around $2,237,811. 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 $600k house?
A 20% down payment is about $120,000, 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."