Rent-versus-buy is not settled by comparing rent with the mortgage payment. A useful comparison includes all ownership costs, transaction costs, alternative use of cash, expected holding period, and the value of flexibility—without requiring an appreciation forecast.
Decision points
- 01
Compare total monthly cash flow first.
- 02
Amortize one-time costs over a realistic holding period.
- 03
Run flat, adverse, and favourable scenarios instead of one forecast.
Create comparable cash flows
For owning, include mortgage interest and principal separately, property tax, strata, insurance, utilities, maintenance, contingency, and transaction costs. For renting, include rent, tenant insurance, likely increases, moving frequency, and the return or liquidity of cash not used for a purchase.
Name the non-financial decision
Tenure security, mobility, renovation freedom, school or care needs, commute, and tolerance for repairs can dominate a narrow spreadsheet result. Record them explicitly so the financial model does not pretend to answer a values question.
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