Rent vs Buy a $1M Home – Financial Comparison
Is it better to rent or buy a $1M home? The answer depends on your local market, how long you plan to stay, and what you could earn by investing your down payment elsewhere. This article runs the numbers for a $1,000,000 home with common assumptions and links to our Rent vs Buy Calculator for a personalized analysis.
Quick Answer
| Label | Value |
|---|---|
| Home price | $1,000,000 |
| Monthly rent (estimated) | $5,000 |
| Break-even year | Year 1 |
| Net buy advantage (7 yr) | $41,311 |
How It Works
The comparison runs year by year for 7 years. Buying costs include a 20% down payment, mortgage at 6.5%, property tax (1.2%), maintenance (1%), and insurance ($1,500/yr). Renting costs are the monthly rent growing at 3% per year. The down payment alternative earns 7% if invested. Home appreciation is 3%. After 7 years, buying a $1,000,000 home has a net advantage of $41,311 compared to renting at $5,000/month. Use our Rent vs Buy Calculator with your actual numbers.
Use Our Calculator
Try our Rent vs Buy Calculator for your own numbers: /calculators/rent-vs-buy-calculator
Related Calculators
With default assumptions (20% down, 6.5% rate, 7-year horizon), the net buy advantage is $41,311. A positive number means buying wins financially. Use our calculator with your actual numbers.
We estimate rent at 0.5% of home price ($5,000/month). Adjust in our calculator to match your local market.
A larger down payment reduces mortgage costs but also means more capital tied up in the home instead of invested. Our calculator lets you adjust the down payment percentage.