When Rent Feels Safer Than Buying (But the Math Tells a Different Story)

The other day, I was talking with my dad. He’s a retired financial advisor and has always given me great advice. We were catching up when I brought up a client I’ve been working with: a single mom whose daughter is about to start high school.

They’ve been renting for a very long time, and she really wants to buy her first home. She’d finally found one that felt right, but after running the monthly numbers, she decided not to move forward. The projected mortgage payment was higher than her current rent, and it the jump was scary to her. The last thing she wants is to be house poor!

“You know she can write off the mortgage interest, right?” my dad asked.

Honestly, I hadn’t even thought about it. I hand my tax paperwork to my accountant each year, trust her to do her thing, and move on.

But his question made me pause… because I realized how many people might be making big financial decisions without seeing the full picture.

So we ran the numbers.

Let’s Break It Down

She’s currently renting for $2,000/month (that’s $24,000 a year) gone with no return. It gives her flexibility, sure, but no equity, no tax advantages, no long-term payoff.

Now let’s say she buys a $350,000 home and puts 10% down ($35,000 upfront). She’d be financing about $315,000 with a 30-year fixed mortgage at 7%.

Her estimated monthly mortgage payment (principal + interest) comes to around $2,095.

Add $350 for taxes, $100 for insurance, and maybe $50 for maintenance, and you’re looking at a total monthly housing cost of roughly $2,600.

On the surface, that’s $600 more than what she’s paying in rent.

But here’s the part that’s easy to miss: In the first year alone, she’ll pay over $21,000 in mortgage interest.

And because she’s a single-income household in the 24% tax bracket, she could write off that interest and see a tax savings of about $5,040.

Broken down monthly, that’s like getting $420 back each month… money that stays in her pocket rather than going to the IRS.

Now her effective cost isn’t $2,600. It’s closer to $2,180.

More Than Numbers—It’s Stability

That $2,180 gets her a roof over her head: it gets her something SHE OWNS. Here, her daughter can hang posters without worrying about losing the deposit. They can each have a space of their own. She can renovate the kitchen or the bathroom to her tastes, and paint it a different color every week if she wants. This would also get her a backyard where they can sit outside together and have a garden.

Her rent could rise so much, without much notice, that they’ll be forced to leave. And this could happen at a very inconvenient time.

Even better with a house she owns? She’s building equity INSTEAD of just paying to live there.

In five years, she’ll have paid down her loan and likely gained some appreciation, too. That’s money she can tap into down the road, whether it’s for college tuition, emergencies, or something else.

The Real Cost of Staying Comfortable

I get why she hesitated. A $600 increase on paper is a big deal. But when you zoom out and account for the tax benefits and long-term equity, the picture shifts.

To be clear: There is nothing wrong with renting. And if she ultimately decides that is right for her, then it’s what’s right for her. I will never pressure or push anyone to buy before they’re ready.

However, sometimes when you have the full picture in front of you, taking the leap isn’t as far away as you may think it is.

Curious what your numbers would look like?

Let’s run them together. No pressure. No guessing. Just a clearer picture of what’s really possible.