Should You Buy, Rent, Refinance, or Sell?

When does buying actually beat renting?

The classic 'rent throws money away' line ignores three real costs of ownership: maintenance (~1% of home value/yr), property tax, and the opportunity cost of the down payment. A renter who invests the down-payment difference into a diversified portfolio can match — and sometimes beat — a homeowner over 10 years.

Buying tends to win when you stay 7+ years, mortgage rates are below long-run market returns, and your local price-to-rent ratio is under ~20. Renting wins when you might move, your job is unstable, or housing in your metro is severely overpriced relative to rent.

• Stay 7+ years → buying usually wins
• Price-to-rent < 15 → strong buy signal
• Price-to-rent > 25 → renting + investing usually wins
• Always compare on after-tax, after-maintenance basis

How to evaluate a refinance in 2026's rate environment

A refinance only makes sense if your monthly savings recoup the closing costs (typically $3K–$8K) within roughly two years and you plan to stay in the home longer than the break-even point. Dropping your rate by 0.75% on a $400K mortgage saves about $180/mo — recouping $5K of closing costs in ~28 months.

Cash-out refinances are different math: you're trading home equity for liquidity. They make sense to consolidate high-rate debt or fund a high-return investment, rarely to fund lifestyle upgrades.

Selling, downsizing, and the 'sell-and-rent' play

If you've held a primary home 5+ years in an appreciating market, you may be sitting on $200K+ of tax-free gain (up to $250K single / $500K married filing jointly). Selling to downsize, relocate to a lower cost-of-living area, or invest the equity can dramatically accelerate Financial Independence — especially for empty nesters.

The 'sell-and-rent' play converts illiquid equity into a portfolio that compounds, while letting you stay in your neighborhood. Run the numbers carefully: rent inflation is the silent killer of this strategy.

How PeakWorth models the buy-vs-rent decision

Rather than a rule of thumb, PeakWorth models both paths — buying versus renting and investing the difference — as separate scenarios, each measured against your baseline, through a year-by-year deterministic simulation to age 95, with federal + state taxes, mortgage amortization, maintenance, property tax, rent inflation, and realistic 7% long-run returns on the invested difference.

Each scenario surfaces your PeakWorth (highest projected lifetime net worth), your FI Age (the year your portfolio reaches ~25× the expenses it must cover after Social Security — roughly 20× your total annual expenses), and the year-by-year cash-flow gap, so 'should I buy?' becomes a dated, dollar-and-year answer for your numbers, not the national average.