Before I walk you through this, I want to be clear about something. This isn’t an argument against homeownership. It’s an argument against making one of the largest financial decisions of your life without knowing the actual number.
Nobody tells you the actual number.
What You Think You’re Buying
You find a house. Let’s say it’s $400,000. You put 20% down — $80,000 — and finance the remaining $320,000 at 7% over 30 years.
Your monthly mortgage payment is roughly $2,129. Over 30 years, that’s $766,440 in total payments.
You paid $766,440 for a $320,000 loan.
That gap — $446,440 — is interest. Pure cost. Gone. That’s the number nobody hands you at the closing table in big bold font. They show you the monthly payment because the monthly payment feels manageable. The full picture does not.
And that’s before we start counting everything else.
The Real Number
Property taxes average around 1–1.5% of home value annually.
On a $400,000 home, that’s $4,000–$6,000 per year.
Over 30 years, $120,000–$180,000.
Homeowner’s insurance runs $1,500–$2,500 per year on average. Another $45,000–$75,000 over the life of the loan.
Maintenance and repairs — the rule of thumb is 1–2% of home value annually. Some years it’s zero.
The year the roof goes, the HVAC dies, and the water heater fails in the same 18-month window, it’s $25,000.
Budget 1% to be conservative. That’s $4,000 per year, $120,000 over 30 years.
Now add it up.
Down payment: $80,000 Interest paid: $446,440 Property taxes: $150,000 (midpoint) Insurance: $60,000 (midpoint) Maintenance: $120,000
Total: $856,440
For a $400,000 house.
The Part That Should Actually Keep You Up
Here’s where it gets uncomfortable.
That $80,000 down payment had another option. Invested in a broad market index fund at a historical average of 7% annually, $80,000 becomes roughly $609,000 over 30 years.
Now imagine what 15-30% would look like.
But it’s not just the down payment. It’s also the monthly cost differential.
If you were renting that same property for $1,800 per month and investing the $329 monthly difference between rent and your mortgage payment, that’s an additional $3,948 per year going into the market. Over 30 years at 7%, that compounds to roughly $400,000.
Total opportunity cost: over $1,000,000.
That is not a typo.
Before You Close This Tab
I own property, but not in the traditional sense. I’m not sitting here telling you renting is always the superior move — it isn’t always. Geographic markets vary dramatically. Appreciation can be real and significant. There are legitimate tax advantages depending on your situation. Stability, community, and the ability to modify your space have genuine value that doesn’t show up in a spreadsheet.
What I am telling you is that the financial case for homeownership is far weaker than the culture around it suggests.
The “rent is throwing money away” argument ignores interest, taxes, maintenance, insurance, and opportunity cost — all of which are also throwing money away, just in a more socially acceptable direction.
The wealthiest people I’ve watched over 20 years are not the ones who bought the most house they could qualify for. They’re the ones who understood the full cost of every major decision before they made it.
A mortgage officer is not going to show you the $856,440 number. A real estate agent is not going to walk you through the opportunity cost calculation. That information exists to be found, not to be handed to you.
Now you have it.
The Decision Still Belongs to You
Run your own numbers. Factor in your local market, your rent alternatives, your investment discipline, your timeline, and what stability is actually worth to you financially.
Just don’t make the decision without the real number in front of you.
Most people don’t. That’s exactly how a $400,000 house becomes an $856,000 decision you didn’t fully agree to.
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This article is for informational purposes only. It should not be considered financial or legal advice. Consult a financial professional before making any significant financial decisions.