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With a five-to-seven-year horizon, I would start from the assumption that renting wins unless the purchase case remains convincing after both entry and exit costs. Equity is not the same as a saving: part of each payment covers financing, while your capital is tied up and the eventual selling...

I disagree slightly with using five years as the only comparison period. It is useful, but only if you also account for the balance remaining after five years. Two loans can demand similar cash payments while paying down principal at different speeds. Compare both cumulative cash outlay and...

Don’t overlook acquisition and eventual selling costs when deciding whether the investment compensates you, even though they are not part of annual net yield. A modest annual spread can disappear if the planned holding period is short.