[dgfitz]

It’s not. This trope is repeated on this forum all the time.

Some people prefer the freedom of not being stuck in one place. Super duper. That’s excellent, they prefer renting.

Trying to convince the rest of the world that it is a sound financial decision in lieu of buying a home and establishing equity is where the argument over “renting is better than buying from a financial perspective” falls apart and the absurdities start getting thrown about.

[Panzer04]

How do you figure?

Its heavily market-dependant, but assuming rent expenses = the cost of interest, from a financial perspective they are close to equivalent. If you take the money that would be paying off the mortgage to invest, you should be in a similar financial position at the end.

1-1 compariaons are hard, though, because in practice houses are huge levered bets on a RE market, so they can have huge returns if chosen well. Those are usually the kinds of markets where rents tend to be lower than the mortgage payment, however, so things might net out more even than you'd expect at the end.

[jb1991]

> assuming rent expenses = the cost of interest

But you cannot make even this simple assumption because rent is not tax deductible but mortgage interest usually is.

[Panzer04]

Depends on the country I guess. Mortgage interest in AU is not tax deductible unless it's an investment (ie. owner-occupiers don't get a deduction). Consumption is not generally tax deductible, was my understanding (and living in a house is basically consumption)

[jb1991]

USA and many European countries deduct mortgage interest from income tax.