Those are not comparable scenarios. You are omitting a lot of detail, which most people do, but the detail is important.
You need to give the bank $200k to get the $800k mortgage. Now you have $200k equity in the house, but you could have had that $200k equity in the stock market (compounding over the years).
Most of the replies here are for the US context. They use 6% interest rates over 30 year term. So their monthly repayments would be $4,797. And they're saying that renting the equivalent house would be about $2,500. I have no idea if this is realistic or not, but I'm just showing you what you're omitting from your calculations. We must also keep in mind, rent will increase over time, while your mortgage won't.
So now in the renting scenario, you have an initial $200k in the stock market growing at the nominal compound rate of say 8% each year. Then you're also investing the different between mortgage and rent (4,797 - 2,500 = 2,297) into the market each month, and that is also going to compound. Then you add in all the extra costs of home ownership over 30 years, then you calculate the value of your house that you now own outright at 30 years and compare it to the pot of money you put into the stock market while renting over those 30 years.
If your pot of money at the end of renting is enough to buy the house outright at that point, with some left over, then renting wins. Otherwise buying wins. (speaking purely financially)
I haven't done the calculations, but now you can see why your simple scenario is not sufficient.
You need to give the bank $200k to get the $800k mortgage. Now you have $200k equity in the house, but you could have had that $200k equity in the stock market (compounding over the years).
Most of the replies here are for the US context. They use 6% interest rates over 30 year term. So their monthly repayments would be $4,797. And they're saying that renting the equivalent house would be about $2,500. I have no idea if this is realistic or not, but I'm just showing you what you're omitting from your calculations. We must also keep in mind, rent will increase over time, while your mortgage won't.
So now in the renting scenario, you have an initial $200k in the stock market growing at the nominal compound rate of say 8% each year. Then you're also investing the different between mortgage and rent (4,797 - 2,500 = 2,297) into the market each month, and that is also going to compound. Then you add in all the extra costs of home ownership over 30 years, then you calculate the value of your house that you now own outright at 30 years and compare it to the pot of money you put into the stock market while renting over those 30 years.
If your pot of money at the end of renting is enough to buy the house outright at that point, with some left over, then renting wins. Otherwise buying wins. (speaking purely financially)
I haven't done the calculations, but now you can see why your simple scenario is not sufficient.