Rent vs buy in Chicago

Inputs (2026, adjustable in the calculator): purchase $459,000, 20% down, 6.3% 30-year fixed, rent $2,300/month growing 3%/year, home appreciation 3.5%/year, market return 7%/year, 2.11% property tax, 1% maintenance, ~7% selling costs at exit. The buyer's wealth lives in equity (principal + appreciation minus exit costs); the renter's lives in the invested down payment and monthly differences compounding.

Early years punish buyers everywhere: at 6.3%, roughly 85% of the first year's payments is pure interest, while ~3% buying costs and ~7% future selling costs must amortise before equity wins. That's why short horizons (under 8 years here) favour renting in Chicago regardless of headlines.

Rate sensitivity: at 4.8% the breakeven moves into buying territory; at 7.3% renting wins even longer. Down-payment opportunity cost matters just as much – if your alternative to buying is cash at 2%, not stocks at 7%, buying improves sharply.

Stability is the unpriced variable: owners are insulated from Chicago's rent growth ($2,300 today is $3,091 in 10 years at 3%) but pay dearly to move early. The honest rule for Chicago: buy when your horizon comfortably exceeds 10 years and the payment fits under 33% of net income – $13,382/month of take-home for this scenario.