Rent vs Buy Calculator for Tech Workers (2026)

Standard rent-vs-buy calculators are built for the US median market. This one is built for Bay Area, Seattle, and NYC — where homes cost $1–3M, down payments are $200–600K, and the opportunity cost of that capital is enormous. It models the 2026 tax landscape including the updated SALT deduction cap,¹ the $750K mortgage interest limit,² and the real cost of tying up a large down payment instead of investing it.

Why HCOL rent vs buy math is different

In a "normal" market — say, a $400K home renting for $1,800/month — the price-to-rent ratio is 18.5×. The carry cost of owning (after tax) roughly matches rent around year 5–7, and equity builds faster than a renter's investment account beyond that.

Bay Area, Seattle, and NYC have price-to-rent ratios of 25–40×. A $1.6M home that rents for $5,000/month has a ratio of 26.7×. At that ratio, the monthly carry on ownership (mortgage + taxes + insurance + maintenance, net of tax deductions) is almost always $4,000–7,000/month more than rent. That's $48,000–84,000/year that a renter can invest instead.

The renter also keeps their down payment invested. At 7% real return, a $320,000 down payment grows to $629,000 in 10 years. This is the central tension: equity build vs. invested down payment and annual surplus.

The three levers that change the answer

1. Home appreciation rate

If you assume Bay Area homes appreciate at 6%/yr real, buying looks much better. Historical nominal appreciation since 1990 is ~3.2%/yr; since 2005 it's ~2.1%/yr. Be honest about your priors — the period 2013–2021 was exceptional, not typical.

2. How long you stay

Transaction costs to buy (~2.5% of purchase) and sell (~5–6% of sale price) are a fixed overhead. On a $1.6M home that's roughly $40K in and $80–96K out = $120–136K in pure friction that must be overcome by appreciation. The longer you stay, the more that friction gets amortized.

3. The 2026 SALT deduction cap

Under the One Big Beautiful Bill Act (OBBBA), the SALT deduction cap rose from $10,000 to $40,400 for 2026¹ for filers with MAGI under $500,000. This meaningfully improves the tax case for ownership in high-tax states like California and New York — but only if your income is under the phaseout threshold. Above $600K MAGI, the cap reverts toward $10,000 and the tax benefit shrinks significantly. The calculator adjusts this automatically based on your MAGI input.

When buying makes sense in HCOL

• You're confident you'll stay 10+ years. Transaction costs amortize, equity compounds, and life stability has real value.
• Price-to-rent ratio is under 22 for that specific property. Some HCOL submarkets — outer East Bay, parts of San Jose, outer NYC boroughs — have lower ratios than prime areas.
• You'd buy with a large cash down payment (40%+) reducing the leverage and the monthly carry gap vs. renting.
• Your MAGI is under $500K. The full $40,400 SALT cap meaningfully improves the after-tax math in CA and NY.
• Mortgage rates drop to 5% or below. At 4.5%, the carry equation shifts by $1,500–2,000/month on a $1.6M purchase.
• Non-financial factors dominate. School districts, family proximity, stability during a kid's school years — these are real and don't show up in the calculator.

RSU volatility and the down payment question

Many tech workers in HCOL markets plan to fund their down payment from RSU vesting. This creates a sequence-of-returns risk that the calculator can't fully model: if your employer's stock drops 40% the year before you planned to buy, your down payment shrinks significantly, possibly right when you'd timed a purchase.

A few frameworks for thinking about this:

• Don't plan to fund >40% of a down payment from unvested RSUs. Treat unvested grants as probabilistic income, not guaranteed capital.
• Maintain 6–12 months of full ownership carry in liquid assets before closing. HCOL mortgages can be $8,000–12,000/month — running out of liquidity after closing is a real risk.
• Consider the RSU volatility adjustment: If your employer's stock has 50%+ annual volatility (common at mid-stage companies), the opportunity cost of holding it as a house is double what you'd estimate using index-fund assumptions.