Rent vs. Buy
Compares your full monthly cost of ownership — PITI plus HOA, PMI, and a repairs reserve — against comparable rent, both before and after the mortgage interest deduction.
Inputs
Verdict
Comparable rent
$2,800
Total monthly to own (pre-tax)
$1,856
Effective monthly to own (after deduction)
$1,534
Rent − own (pre-tax)
+$944
Buying costs less monthly than renting.
Rent − own (after deduction)
+$1,266
Counts your itemized tax savings on mortgage interest and property tax.
Caveats: this is a monthly cash-flow comparison, not a full investment model. It excludes home appreciation, the opportunity cost of your down payment, transaction costs, and selling fees. The tax deduction only helps if your total itemized deductions exceed the standard deduction.