What Horizon Point Calculates
The exact year buying a home becomes cheaper than renting at your inputs.
Horizon Point answers one question: how long do I need to own before buying beats renting?
Rent-vs-buy is a two-line chart, not a vibe. Horizon Point runs 30 years: cumulative rent on one side, ownership cost minus equity built on the other. Runway context:
cumulative_rent(y) = monthly_rent × 12 × y ownership_cost(y) = interest + tax + maintenance + down_payment + closing net_ownership(y) = ownership_cost(y) − equity_built(y) horizon_point = min y where cumulative_rent(y) ≥ net_ownership(y) if horizon_point < 7 → STABLE (buy) if horizon_point ≤ 15 → GUARDED else → CRITICAL (rent)
- Lock honest inputs: 1-2% maintenance, 2-3% appreciation, 7% selling cost on exit.
- Compute cumulative_rent and net_ownership across 30 years.
- Check horizon_point against planned tenure and runway:
runway not set . - If tenure < horizon_point, rent. The math does not clear.
- Rerun after rate changes of 1%+ or rent hikes above 10%.
Quick answer
Horizon Point answers one question: how long do I need to own before buying beats renting?
▸ Key Specs
- ▸ Cumulative rent = monthly_rent × 12 × years (with optional rent inflation).
- ▸ Ownership cost = interest + property_tax (~1.25%/yr) + maintenance (1-2%/yr) + down_payment + 3% closing at month 0.
- ▸ Equity built = principal_paid + (appreciation × years). Subtract from ownership cost for net.
- ▸ Horizon Point = year where cumulative_rent first meets or exceeds net_ownership_cost. Current runway:
runway not set . - ▸ No crossover in 30 years → No Break-Even. Renting wins across the horizon.
▸ Worked Examples
- $2,200 rent, $450k home, 20% down, 6.5% mortgage, 3% appreciationHorizon Point ~year 7. Buying wins if tenure clears 7 years. Runway must support the commit:
runway not set . - Same inputs, 0% appreciationHorizon Point slides to ~year 12. Low-appreciation markets favor renting.
- Low-rent market: $1,200 rent, $350k home, same loanHorizon Point year 15-20+ or never. Cheap rent pushes break-even out.
When to use which tool
- CYAN · STABLE — Break-even under 7 years and you plan to stay — buy, ownership wins cleanly.
- GOLD · GUARDED — Break-even 7-15 years — viable only if tenure is confident; marginal otherwise.
- MAGENTA · CRITICAL — Break-even above 15 years or never — rent, the math never clears in your window.
Related
- Rent vs Buy CalculatorEstimate the year buying a home becomes cheaper than renting after mortgage interest, maintenance, selling costs, and cash opportunity cost.
- When to Run Horizon PointFive real-estate moments where the break-even year actually changes the decision.
- Six Horizon Point MistakesThe errors that make buying look cheaper than it is — and the one that makes renting look cheaper than it is.
Frequently asked questions
› Why subtract equity from ownership cost? Troubleshooting
Equity is real value you keep when selling — it offsets the cash out. Renting has no equivalent store of value.
› What if I never plan to sell?
Then treat the paid-off home as a "free rent" annuity from year 30 onward. Horizon Point still tells you when the cumulative cost flips.
› Is closing cost included? Trust & accuracy
Yes — 3% of price is added to the down payment as closing cost at month 0.
› How should I use a decision framework in real life? How-to
Use a decision framework to expose the tradeoff, not to outsource the decision. Write down the inputs, compare the output with your constraints, then ask what would change the answer. The strongest use is scenario testing: base case, conservative case, and failure case.
› Is this financial, legal, or tax advice? Trust & accuracy
No, this is not legal, financial, tax, medical, or professional advice unless the page explicitly says that use case is supported. It organizes assumptions so you can inspect them. Verify high-stakes choices with qualified people who can review facts, contracts, regulations, and downside risk.