You need to subtract the rent you're saving from the interest and also need to take into account if you can deduct the interest from your taxes [1]. If that interest rate ends up lower than inflation, you're realizing gains.
Even then, this assumes you'll have enough deductions to not take the standard deduction. I did this analysis once. I took the cost of a rental I was considering, figured out how much I claimed on long-form taxes. Then I re-calculated using the standard deduction (loss of housing interest deduction meant standard deduction was better for me). Then used the tax difference spread out over 12 months to calculate the "true" cost of my mortgage. It turns out the mortgage was quite a bit cheaper.
Even still, though, I am taking on a risk of not being able to sell the house if I ever change jobs. It's appreciating rapidly right now, but everyone knows this can change in months.
Even still, though, I am taking on a risk of not being able to sell the house if I ever change jobs. It's appreciating rapidly right now, but everyone knows this can change in months.