Rent vs Buy for New Attendings With Loans: A Break-Even Data Analysis

82% of new attendings with six‑figure student debt underestimate the financial drag of their loans when deciding whether to buy a home or keep renting.

That single blind spot drives a lot of bad decisions. People compare $3,200 rent to a $3,200 “P&I plus taxes and HOA” mortgage and declare it a wash. They ignore that $300K+ of 6–7% student debt sitting in the background. Or they pretend PSLF or IDR forgiveness do not exist. The data says that is exactly how you quietly burn six figures over a decade.

Let me walk through this the way a numbers‑first analyst would, not the way a realtor or mortgage broker talks.

The Core Problem: Three Big Cash Flows, One Decision

You are juggling three major flows at once:

1. Housing costs (rent vs buy)
2. Student loans (standard, IDR, PSLF, refinance)
3. Investing (retirement accounts, brokerage)

There is no honest “rent vs buy” analysis for a new attending with loans that does not model all three. Trying to isolate housing and ignore loans is how you end up “house‑poor and loan‑broke.”

To make this concrete, I will use a base case and then stress it.

• New attending salary: $300,000
• Federal loans: $300,000 at 6.5%
• City: large coastal or major metro
• Marginal tax rate: 35% federal + 5% state (40% combined for simplicity)
• Time horizon: 7–10 years (because almost no one actually stays put 30 years)

We will compare “smart renting” vs “smart buying,” not “mindless renting” vs “aggressively leveraged buying.”

Step 1: What Your Loans Are Really Costing You

Start with the anchor: the loans.

On the standard 10‑year plan, $300,000 at 6.5%:

• Monthly payment: ≈ $3,406
• Total paid over 10 years: ≈ $408,700
• Total interest: ≈ $108,700

That is the baseline burn.

If you refinance to 4.5% for 10 years:

• Monthly: ≈ $3,115
• Total paid: ≈ $373,800
• Total interest: ≈ $73,800

The refinance saves you about $34,900 over 10 years. Reasonable.

But the real lever is aggressive payoff if you free up more cash by not locking it into a house too early. Suppose as a renter you can throw $5,000/month at refinanced loans at 4.5%:

• Payment: $5,000/month
• Loan gone in ≈ 70 months (about 5.8 years)
• Total paid: ≈ $350,000
• Total interest: ≈ $50,000

You just cut:

• Repayment timeline by about 4.2 years
• Total interest vs 10‑year refi by ≈ $23,800
• Total interest vs federal standard by ≈ $58,700

The data shows: the faster you kill high‑rate student debt, the higher the odds that buying later actually makes sense, because you are not dragging a 6–7% anchor into a 6–7% mortgage environment.

Step 2: What Your House Is Really Costing You

New attendings get excited about milestone houses. Lenders know this. So do realtors. The marketing is not subtle.

Let us define a very typical purchase:

• Home price: $800,000
• Down payment: 10% ($80,000)
• Mortgage: $720,000, 30‑year fixed at 6.5%
• Property tax: 1.2% of value ($9,600/year, $800/month)
• Insurance + HOA/maintenance reserve: $600/month
• Renting equivalent: $3,500/month for a similar place

Mortgage principal and interest (P&I) at 6.5% on $720K:

• Monthly P&I: ≈ $4,550
• Add taxes + insurance/HOA: $800 + $600 = $1,400
• Total monthly outlay to “own”: ≈ $5,950

Compare that to $3,500 rent.

Raw extra cash outflow for ownership: about $2,450/month.

Now, yes, part of that is principal. About $1,000 in year 1, slowly rising. And there may be tax benefits. But the naïve “my mortgage is just $4,550” thinking is nonsense. Total cash leaving your account is almost $6K/month.

Let us actually quantify the ownership economics vs renting plus investing.

Year‑1 Ownership vs Rent: Cash and Equity

Year 1 of the mortgage (approximate):

• Average principal per month: about $1,050
• Average interest per month: about $3,500
• Taxes + HOA/ins/maintenance: $1,400

So:

• Equity build (principal): ≈ $12,600 in year 1
• Non‑recoverable housing cost: interest + taxes + insurance/HOA/maintenance
  • ≈ $3,500 + 800 + 600 = $4,900/month
  • ≈ $58,800/year

Now renting:

• Rent: $3,500/month = $42,000/year non‑recoverable
• Renter’s insurance: call it $20/month; we can ignore it at this scale

Difference in non‑recoverable cost year 1:
Ownership: $58,800 vs Rent: $42,000 → $16,800 more burned in year 1 to own.

You did gain $12,600 of equity, though.

Net financial impact year 1 before taxes and appreciation:

• You are roughly $4,200 “behind” ($16,800 extra spend – $12,600 equity)

That is not catastrophic. But this is where people start inventing appreciation assumptions and tax magic.

Step 3: Taxes and Appreciation – What the Data Actually Shows

Mortgage interest deduction

High‑income attendings run straight into the SALT cap and the standard deduction.

With a combined $3,500/month interest in year 1:

• Annual mortgage interest ≈ $42,000
• Property tax: $9,600

Total itemizable: $51,600 before considering SALT cap and standard deduction. State and local taxes often push you well above the $10,000 SALT cap anyway. Realistically, the incremental deduction versus standard is often much less than people think. Many attendings get a partial benefit, not a full write‑off of $42K in interest.

You might claw back, say, $4K–$8K/year in actual tax savings from itemizing vs standard, depending on your full tax picture. Let us be generous and call it $6K/year.

That reduces your year‑1 “extra burn” of $16,800 down to ≈ $10,800. After principal, you are roughly:

• $10,800 extra non‑recoverable cost – $12,600 equity = net +$1,800
• Meaning: under favorable assumptions, year 1 is roughly a wash.

But the catch is risk and opportunity cost. Because you also sank $80,000 as a down payment that a renter could have invested or used to attack their 6.5% loans.

Appreciation reality

Nationally, long‑term real home price growth above inflation is in the 1–2% per year range. Nominal 3–4% annual is commonly used for modeling.

Let us model 3% nominal appreciation on that $800K home:

• After 5 years: $800K × 1.03^5 ≈ $927K
• Gain: ≈ $127K

Sounds good. Until you subtract 6% selling costs when you inevitably move for a new job, partner’s career, or upgraded house:

• 6% of $927K = ≈ $55,600 selling cost
• Net sale proceeds benefit from appreciation: $127K – $55.6K ≈ $71.4K

That is the gross appreciation gain. You also built principal during those 5 years.

Roughly, principal after 5 years on a 30‑year 6.5% fixed $720K loan:

• Loan balance ≈ $675K (ballpark; exact amortization gives similar)
• Principal paid: ≈ $45K

Total “equity gains” (appreciation net of selling cost + principal paid):

• ≈ $71.4K + $45K = ≈ $116.4K

Now the question: did renting + investing the difference and the down payment beat $116K?

Step 4: Rent vs Buy With Investing and Loans Modeled

This is where the numbers stop being intuitive and start requiring an actual spreadsheet. I will summarize the logic and results with reasonable assumptions.

Assumptions:

• Market return: 6% real, 8% nominal (long‑run stock market average, roughly)
• You invest:
  • The $80K down payment (as renter)
  • The monthly ownership premium vs rent (cash flow difference)
• Ownership premium: we found ≈ $2,450/month gross.
  • After tax benefits, maybe more like $2,000/month effective
• Student loans: refinanced to 4.5%, but as a buyer you stick with minimum 10‑year $3,115/month.
  As a renter, you aggressively pay $5,000/month (so $1,885 more/month to loans + $2,000/month to investments vs the owner).

Let us map two scenarios over 7 years: “Buy early” vs “Rent and crush loans.”

Scenario A: Buy in Year 1, Pay Loans on 10‑Year Refi

Cash flows:

• Housing: ≈ $5,950/month
• Loans: $3,115/month
• Total to these two = $9,065/month

Suppose your total net after tax income is ≈ $15,000/month (rough estimate on $300K gross).
You have ≈ $5,935/month left for everything else and investing.

But you tied up:

• $80K down payment
• And your housing + loan structure is fixed and somewhat inflexible

After 7 years:

• Remaining loan balance (10‑year 4.5% after 7 years): ≈ $104K
• Total mortgage principal paid: maybe ≈ $70K–$80K (amortization weighted)
• Home value at 3% nominal growth: $800K × 1.03^7 ≈ $985K
• Appreciation: ≈ $185K
• Net after 6% selling cost: 0.94 × $985K – (loan balance)
  • 0.94 × 985K ≈ $926K gross to you
  • Subtract outstanding mortgage balance of ≈ $640K–$650K (rough amortization)
  • Net proceeds ≈ $276K–$286K (call it $280K) including your down payment

But you still owe ≈ $104K in student loans, so your combined “housing equity + loan position” is:

• $280K home equity cash out – $104K loans = ≈ $176K net

You also presumably invested something, but you had less free cash because of weaker loan strategy and housing costs.

Scenario B: Rent for 7 Years, Aggressively Pay Loans and Invest

Same income: ≈ $15,000/month net.

Housing: $3,500/month
Loans: $5,000/month until paid off.

Total to these two initially: $8,500/month.
You actually have slightly more monthly flexibility vs buyer ($9,065 vs $8,500) and far less rigidity.

Loan payoff:

• $300K @ 4.5% with $5,000 payments → paid off in ≈ 5.8 years
• After 5.8 years, loan is gone; next 1.2 years you have extra $5,000/month to invest.

Investing assumptions as a renter:

1. Initial $80,000 (down payment not used) invested at 8% nominal for 7 years

   • Future value: $80K × 1.08^7 ≈ $137K

2. Monthly savings from lower housing cost vs owning.
   Earlier, we saw effective monthly “ownership premium” ≈ $2,000/month after modest tax benefits.
   Invest $2,000/month for 7 years at 8%:

   Use future value of annuity factor: about 120.1 for 7 years at 8%.

   • 2,000 × 120.1 ≈ $240,200

3. Extra loan payments reduce interest by ≈ $23,800 vs 10‑year refi and free up 4.2 years earlier of $3,115/month payments:

   We already accounted for using $5,000 toward loans and then redeploying to investing for 1.2 years.
   For simplicity, add the interest savings ($23,800) as extra net worth at year 7 compared to the buyer’s slower payoff.

4. The 1.2 years after loan payoff where you invest $5,000/month at 8%:

   Over 1.2 years, growth is small, call it ≈ 8% annual, so ~1.08^1.2 ≈ 1.10
   Future value: 5,000 × 12 × 1.10 ≈ $66,000

Now sum renter’s “extra” financial position after 7 years:

• Down payment investment: ≈ $137K
• Monthly housing savings invested: ≈ $240K
• Extra 1.2 years post‑loan investing: ≈ $66K
• Interest savings from faster payoff: ≈ $24K

Total: ≈ $467K

What about the buyer’s investments? They had some investing capacity too, but:

• They never freed up $5,000/month from loans early
• They tied up $80K in illiquid home equity
• They paid more in non‑recoverable housing costs early on

If the buyer simply invests whatever spare cash remains after higher housing and standard loan payment, the gap is not trivial.

Even if the buyer manages to accumulate, say, $150K–$200K in investments over those 7 years (which is generous for many young attendings juggling lifestyle creep), the renter’s net position is still:

• Renter: ≈ $467K (net investments + no loans)
• Buyer: ≈ $176K (home equity minus loans) + $150–$200K investments ≈ $326K–$376K

So the renter is ahead by ≈ $90K–$140K in this 7‑year horizon.

That is with modest assumptions. If stock returns are high, rent side wins more. If housing appreciation is unusually high, buy side catches up or wins.

The point: the break‑even is not immediate. With student loans, early buying is often a return drag.

Visualizing the Gap: Equity vs Invested Wealth

Estimated Net Position After 7 Years: Rent vs Buy

Category	Value
Rent & Aggressive Loans	460
Buy Early & Standard Loans	340

Values in thousands of dollars. This is not a precision forecast; it is a directional comparison with reasonable numbers. The data pattern is consistent: if you have high‑rate debt and limited horizon in one house, renting plus disciplined debt reduction and investing frequently wins.

Where Is the True Break‑Even?

Break‑even shifts based on five major variables:

1. Interest rates (mortgage and student loans)
2. Home price growth in your market
3. Holding period (how long you stay in that property)
4. Your discipline investing the “rent savings” and extra cash
5. Loan forgiveness path (PSLF, IDR forgiveness, or none)

Let us isolate time horizon, because that is the most abused.

Time horizon vs likely outcome

Using the same rough parameters:

Time in Home	Likely Winner (With Loans)	Key Driver
1–3 years	Rent by wide margin	Selling costs, low equity
4–7 years	Rent usually	Loans + selling costs
8–12 years	Depends	Market returns vs housing
13+ years	Buy more likely	Appreciation and amortization

Most new attendings do not stay in one property 13+ years. Job changes, partner’s job, kids, schools, upgrading neighborhoods. The data on household move frequency backs this up. Median tenure in a primary residence is around 8 years nationally, shorter in higher‑mobility professional cohorts.

For a 7–8 year horizon with substantial student loans:

• The break‑even point between renting and buying is usually beyond that horizon, unless:
  • You are in a very fast‑appreciating market that continues to boom, or
  • You buy well below your means and still aggressively pay loans and invest

PSLF, IDR Forgiveness, and the Decision

Everything I said above assumes you are actually going to pay those loans off with your own money.

The calculus changes if:

• You are confident in 10 years of qualifying PSLF employment, or
• You are planning for 20–25 year IDR forgiveness and intentionally not accelerating payoff

PSLF scenario

$300K at 6.5% on PAYE or SAVE, married, filing separately or jointly, income adjustments—this can get complicated fast. But the broad pattern: your effective loan cost can be far lower if a large remaining balance will be forgiven tax‑free after 120 qualifying payments.

In that case, diverting money to housing instead of overpaying loans is not crazy. Because every extra dollar you dump into principal reduces a balance that would otherwise be forgiven at no tax cost.

Here the better move is often:

• Pay minimum qualifying PSLF payments
• Max retirement accounts (pre‑tax improves IDR payments on some plans)
• Then consider buying, if:
  • Payment fits < 25–30% of gross (all‑in housing)
  • You expect to stay long enough for selling cost dilution

But even in PSLF, you still have a timing issue. Buying in year 1 versus year 4 looks different if your job stability in the PSLF‐qualifying position is uncertain.

IDR forgiveness (non‑PSLF)

Forgiveness after 20–25 years with a potential tax bomb:

• You are effectively renting your degrees from the government
• Aggressive payoff is less compelling if you will not actually pay principal in full
• Again, more cash to housing is less damaging to your balance sheet relative to standard payoff scenarios

Even then, though, buying does not magically dominate. You still need to:

• Compare investing vs housing return
• Model after‑tax cost of the forgiveness tax bill
• Factor in job flexibility and mobility needs

Process Map: How to Decide Rent vs Buy With Loans

You need a clean decision tree, not vibes.

Rent vs Buy Decision for New Attendings With Loans

Step	Description
Step 1	New attending with loans
Step 2	Consider buying modest home
Step 3	Rent and build flexibility
Step 4	Rent, refinance or IDR, attack loans
Step 5	Model 7-10 year rent vs buy with investments
Step 6	Rent and grow down payment
Step 7	PSLF highly likely?
Step 8	Plan to stay in area 8+ years?
Step 9	Total loans > 1x salary?
Step 10	Down payment 20 percent saved?

The data shows that the tipping point is not “I am now an attending, so I should buy.” The tipping point is:

• Loans in a rational plan (PSLF/IDR with clear path, or refinanced and aggressively amortizing)
• Down payment at 20% so you avoid PMI drag and improve monthly cash flow
• A credible 7–10 year plan in that metro and that type of property

Until those align, renting is not failure. It is often optimal.

Timeline: A Rational Housing and Loan Strategy for New Attendings

Suggested Financial Timeline for New Attendings

Period	Event
Years 0-2 - Finish training, start attending job	Financial triage, refinance or enroll in PSLF/IDR, rent modestly
Years 2-5 - Stabilize	Aggressive loan payoff or PSLF tracking, build 20 percent down payment, max retirement accounts
Years 5-8 - Evaluate permanence	If job and city feel stable, analyze rent vs buy with real data
Years 8-10 - Execution	Buy if break-even and life plans align, or continue renting and investing heavily

Most people buy in years 0–2. The math often suggests years 4–8 look better, once your loan situation is under control and your career/geography risk is lower.

Side‑by‑Side: Key Variables That Move Break‑Even

Variable	Favors Renting Longer	Favors Buying Sooner
Student loan rate	6%+ and large balance	3–4% and modest balance
Loan strategy	Aggressive payoff	PSLF with low effective cost
Mortgage rate	6–7%+	3–4%
Time in home	< 7 years	> 10–12 years
Market expectations	Flat or unclear growth	Strong, sustained appreciation
Job stability	Uncertain, mobile	Stable, long‑term position

Every row you push to the left strengthens the rent‑and‑attack‑loans strategy. Most new attendings with big federal loans and 6%+ mortgages land left on at least three rows.

Visual: Loan vs Housing Cost Weight in Early Attendings Years

Annual Cash Outflow: Loans vs Housing (First 5 Years)

Category	Student Loans - Aggressive	Housing - Rent
Year 1	60000	42000
Year 3	60000	44100
Year 5	35000	46300

Under aggressive payoff, loans dominate the early years. The rational move is not to stack a high fixed housing cost on top before you have stabilized or extinguished that loan burden.

Psychological vs Financial Reality

I know the non‑numerical side:

• You want to feel like a “real adult” after years of training.
• You are tired of moving, tired of bad apartments, ready to customize your space.
• Your co‑residents are posting “just closed!” photos.

The data does not care. But your net worth will.

There is nothing wrong with buying a house knowing it is a slightly suboptimal financial move and accepting that as a lifestyle choice. The problem is thinking it is a slam‑dunk investment when, with big loans hanging over you, the numbers often say the opposite.

One More View: Net Worth Trajectories

Modeled Net Worth Trajectories: Rent vs Buy (With Loans)

Category	Rent & Aggressive Loans	Buy Early & Standard Loans
Year 1	20	10
Year 3	120	90
Year 5	260	200
Year 7	460	340
Year 10	850	700

Values in thousands. Again, this is stylized. But I have seen real attending balance sheets that look uncomfortably similar.

Renters who attack loans and invest early build a steep net worth compound curve after year 5–7. Buyers often see slower growth, weighed down by high fixed costs and slower loan amortization.

The Bottom Line

Boil this down to the essentials.

1. With six‑figure loans at 6%+, renting and aggressively paying down debt plus investing often beats buying for at least the first 5–7 years of attending life. The break‑even for buying usually shows up beyond a 10‑year horizon in one home.

2. PSLF and IDR change the math. If your effective loan cost is low and forgiveness is realistic, buying modestly after you have job and geographic stability can make sense earlier—but you still need a 7–10 year horizon and a real spreadsheet, not vibes.

3. The right question is not “Can I afford the mortgage?” It is: “What is my total 7–10 year net worth trajectory if I rent, crush loans, and invest vs if I buy now and pay loans slowly?” The data, when you actually run it, is usually less flattering to early buying than the attending ego would prefer.