Consider the following example:
Monthly payment $3000
Annual property tax $2000
Annual Increase in home value 0%
Down Payment $10000
Interest Rate 6%
Monthly rent $1000
Year comparison 10
You should Buy!
It looks like you should Buy based on the assumptions you have given us.
Why? If you buy for $452842.14 (the maximum you would qualify for) you will pay down your mortgage of $442842.14 by $105493.48 over 10 year(s) with your Principal and Interest payments of $2833.33 per month, plus your property will increase in value by $0 for a total investment growth of $105493.48.
This total is greater than your total investment growth from renting, which is approximately $40328.31 after 10 year(s). This was calculated by growing the monthly savings from renting ($2000.00) plus your current downpayment of $10000.00 at a standard after-tax rate of 4% per annum.
The main problem is in the amount saved each month renting. Even if this money is stuffed underneath your mattress it would add up to $240,000. Substantially more than the 40K determined by the calculator.
Thanks to poster lukecs from Alberta Bubble Blog for finding this.
Note: Even with $10/month rent it still returns the same result.