<prompt> Human: The company I worked for got acquired late last year. I got paid out 850k after taxes in December and I just have half the money in an index fund SPY and the rest in a high yield checking account as I didnt want to make any serious decision for a few months. I am still with the acquired company and got a raise on top of it, so I am making around 110k with some bonus of 10-15 not guaranteed. My current expenses look like this: Net Salary4700 rent2200 food 150 silicon valley start ups have free food cable 60 phone50 utilities35 expenses total3695 401k 151200 Now the avg home price where I am SF Bay Area for a 1bd is around 700k. I was thinking I could put a large down 75 and pay a much lower monthly rate that beats the 2200 I pay now and might go up when the lease is up in July. Or do I wait out the craziness that is the SF real estate market and wait until this market cools down? EDIT Lease is up in a few months and rent is going to go up, market rates would put the 2bd apt im in around 5500, so I could be paying 2700. I also am not leaving this area, my family, friends and work are here, so thats not an option.. sorry Omaha. Thanks for this cool calculator I didnt see it was also in the sidebar. Also, some folks are suggesting buying outright and having no mortgage. However with rates so low, I might be able to put some of this into index funds and muni bonds to offset or make more money than a 30 or 15yr mortgage. I also see theres options for a 51 ARM, could I do this option and if rates go up in 5 years I just pay off the mortgage with the rest of this money? FYI Also have savingsemergency fund, funded roth ira401k as well.  <response>: I went from paying 1400mo in rent to buying a house for 274k. The NY Times calculator is an excellent tool that provided similar predictions to my own painstaking research and calculations.For me, buying the house was mostly about the improvement in life style. I wanted to have my own place, with a private yard, and much more living space. The house I bought was more I want to live here for the next 30 years than this is the best financial move for me.After arriving at the conclusion that what I wanted was a house, and not an investment, the decision was much easier to make.My advice is simple: if you want to buy a condo, buy a condo as though the money paid had no return. If you want to make an investment, make an investment as though it has no bearing on your living situation. Where people make mistakes is when they get googly-eyed and see their housecondo as being great as both. 