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I'm doing this from memory, as this study we did was in the early 80s. But we compared future net savings at retirement (ages 65) because that was a good end point due to retirement and lifestyle changes. As I recall, the renter had already passed the homeowner in monthly housing expenses at about age 55-60 or so.....i.e. the homeowning twin was making savings contributions. This occurs because the P&I on a fixed rate mortgage is constant while rent grows with inflation although most of the other expenses of ownership (property taxes, insurance, maintenance) also growth with inflation. There is a 'cross-over' point on the total monthly housing expenditures. But this is separate from the total amount saved. And I don't think we calculated when the future savings amounts would have theoretically been equal

An issue we had some debate about was whether the principal part of the P&I payment should be considered a monthly expense, as it really is a form of savings. I think we finally agreed that it was really a measure of available household cash flow and the principal payment was really a form of forced savings as part of the monthly housing expense that would be recaptured in later it was kept categorized as a monthly expense.

This is all very theoretical and academic, as no two people would ever live this way....but it was a kind of fun exercise. But it did show the affect of the large costs of buying and selling...which sometimes gets overlooked when comparing just the monthly costs of buying vs renting.

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