Rent vs Buy
Rent vs buy in San Jose: what a 10-year comparison actually shows
Using San Jose's actual median home price and the same math behind our Rent vs Buy calculator, here's what buying vs. renting-and-investing looks like at 5, 10, 15, and 20 years — not a rule of thumb, an actual run of the numbers.
Educational estimate only — every input here is adjustable. Swap in your own price, rent, and rate on the calculator for a result specific to you.
The setup
A median-priced San Jose home, financed at 20% down
These are the assumptions behind every number on this page. Each one is adjustable — this is meant to be a realistic starting point, not your specific numbers.
| Input | Value used here | Why |
|---|---|---|
| Home price | $1,402,500 | San Jose's actual published median price (see /areas). |
| Down payment | 20% ($280,500) | A common round-number planning assumption. |
| Mortgage rate | 6.25%, 30-year fixed | Change this on the calculator to match your actual quote. |
| Current rent | $3,000/mo | The calculator's own default — not a verified San Jose rent index. |
| Home appreciation | 4%/yr | A long-run planning assumption, not a forecast. |
| Investment return | 6%/yr | Applied to the down payment plus the monthly gap between owning and renting. |
The result
True monthly cost: about $9,738/mo — renting + investing stays ahead through year 20
Buying builds home equity, but it also ties up cash in a down payment, closing costs, and a 6% selling cost if you ever sell. Renting and investing that same cash — plus whatever renting saves you each month — compounds the whole time. Under these assumptions, that compounding wins at every checkpoint through 20 years.
| Year | Buy (net worth) | Rent + invest (net worth) | Difference |
|---|---|---|---|
| Year 5 | $556,731 | $896,405 | Rent + invest ahead by $339,674 |
| Year 10 | $1,006,333 | $1,650,802 | Rent + invest ahead by $644,469 |
| Year 15 | $1,568,563 | $2,633,436 | Rent + invest ahead by $1,064,873 |
| Year 20 | $2,273,389 | $3,916,793 | Rent + invest ahead by $1,643,404 |
Buy net worth = home value − remaining mortgage balance − estimated 6% selling cost. Rent + invest net worth = the down payment and closing cash, invested from day one, plus whatever renting costs less than owning each month, also invested — all compounding at the assumed return.
Why renting stays ahead here
Two assumptions do most of the work: appreciation vs. investment return
This isn't a verdict against buying in San Jose — it's what these specific assumptions produce. Two levers matter most.
4%/yr appreciation is the biggest lever
If San Jose home values grow faster than 4%/yr over your holding period, the buy line closes the gap. If they grow slower, it widens further.
6% selling cost is a real, recurring drag
Every year in the table assumes you sell that year and pay roughly 6% in agent commissions and closing costs. Staying longer before selling spreads that fixed cost over more years of appreciation.
Next step
Run this with your own numbers
Your actual rent, rate, down payment, or expected stay will move every figure on this page. Change one assumption at a time and watch the break-even year move.