Why Renting Can Beat Buying a House (Math Inside)

Rent vs buy a house in 2026: with mortgage rates above 7%, renting can leave you about $65,000 richer after 5 years. I break down every number, plus the one case where buying still wins. 🏠 Is it better to rent or buy a house right now? In this video we run the full rent vs buy math using today's U.S. median home price, a 7.4% 30-year mortgage rate, and real hidden costs like property tax, insurance, PMI, maintenance, closing costs, and selling costs. You'll see why your mortgage payment is NOT your real cost of owning a home, and how opportunity cost changes the whole answer. ⏱️ TIMESTAMPS 0:00 Renting vs buying: the $65K gap 0:10 The example (home price, down payment, rate, rent) 0:40 Reason 1: Your mortgage isn't your real cost 1:25 Reason 2: Early mortgage payments are mostly interest 2:05 Reason 3: The opportunity cost (rent and invest the difference) 2:55 When buying a house actually wins 3:35 Recap + which one would you choose? 📊 ASSUMPTIONS USED (plug in your own numbers) • Home price: $420,000 (close to the U.S. median) • Down payment: 10% ($42,000), loan amount $378,000 • Mortgage: 30-year fixed at 7.4% (Freddie Mac PMMS average) • Principal and interest: about $2,600/month • Property tax: about 1% of home value per year (~$350/month) • Homeowners insurance: ~$200/month • Mortgage insurance (PMI): ~$200/month • Maintenance: 1% of home value per year (~$350/month) • Total monthly cost of owning: about $3,700 • Comparable rent: $2,400/month, rising 3% per year • Closing costs: ~3% ($12,600) • Selling costs: 5–6% of sale price • Home appreciation: 3% per year, selling after 5 years • Investment return: 7% per year in a diversified index fund • Invested: $54,600 (down payment + closing costs) + the monthly cost difference ⚠️ These are simplified estimates. Your results will change with your city, rate, tax situation, and how long you stay. Always run rent vs buy numbers for your own market before you sign. 🔗 USEFUL TOOLS • Freddie Mac weekly mortgage rates: freddiemac.com/pmms • Search "rent vs buy calculator" (NerdWallet and Bankrate both have free ones) 💬 Would you rent or buy at 7% mortgage rates? Comment below! 👍 Like and subscribe for more money math that actually makes sense. DISCLAIMER: This video is for educational and entertainment purposes only. It is not financial, investment, tax, or legal advice. I am not a financial advisor. Investing involves risk, including possible loss of principal. Past performance does not guarantee future results. Consult a licensed professional before making financial decisions. #RentVsBuy #MortgageRates #PersonalFinance