Rent vs buy a $700k house
Over 30 years, buying a $700k home comes out about $414,541 ahead — comparing buying (20% down, $140,000) against renting at $3,500/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 $140,000 down payment. The renter invests it (and any monthly difference) at 7%; the buyer puts it into a $700k home appreciating 3%/yr with a 30-year mortgage. In today's dollars:
| Age | Rent & invest | Buy |
|---|---|---|
| 30 | $176,927 | $173,451 |
| 35 | $411,919 | $452,245 |
| 40 | $693,461 | $784,226 |
| 45 | $1,031,453 | $1,180,931 |
| 50 | $1,438,308 | $1,656,697 |
| 55 | $1,929,709 | $2,229,486 |
| 60 | $2,523,554 | $2,938,095 |
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 $700k home is compared to $3,500/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.
When the loan crosses into jumbo territory
A home at this level often pushes the mortgage past the local conforming loan limit and into jumbo territory. Jumbo loans are underwritten more strictly: lenders typically expect a larger down payment, stronger credit, and several months of cash reserves, and the rate can sit higher than on a comparable conforming loan. A higher mortgage rate reshapes the whole comparison.
Rate matters because it drives the monthly payment and decides how much of each early payment goes to interest instead of principal. The higher the rate, the taller the hurdle that owning has to clear before it beats renting, and the longer it takes equity to build. When rates are elevated, renting and investing the difference is more often the stronger financial choice — at least until you can refinance.
Weigh the flexibility, too. Locking a large loan at a high fixed rate hedges your housing cost against inflation, but it also commits a lot of monthly cash flow to a single illiquid asset. If you might move within a few years, the transaction costs of buying and then selling can easily swamp any interim gain.
Common questions
Is it better to rent or buy a $700k house?
Over 30 years in this projection, buying comes out about $414,541 ahead — buying ends around $2,938,095 vs renting-and-investing around $2,523,554. 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 $700k house?
A 20% down payment is about $140,000, 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."