Rent vs Buy Calculator
Compare the true cost of renting vs buying over any time horizon. Factors in mortgage, taxes, maintenance, appreciation, rent inflation, and opportunity cost.
Renting
Buying
What you'd earn investing the down payment instead
How to use this calculator
Enter your current monthly rent and expected annual rent increases. For the buying side, enter the home price, your down payment, and the mortgage parameters. Then enter the extras: property tax, insurance, maintenance, HOA, closing and selling costs, expected appreciation, and what you'd earn investing the down payment if you rented instead. The calculator shows total cost of each path and the break-even year.
What the comparison actually measures
Total cost renting = all the rent paid, minus the growth of the down payment you invested instead. Total cost buying= mortgage payments + taxes + insurance + maintenance + HOA + closing costs, minus the equity you'd walk away with (after selling costs). The smaller number is the cheaper path for the period you chose.
The break-even year
Because buying has large upfront costs (down payment, closing) and selling has large exit costs (6% agent commission is standard), the short-term math almost always favors renting. The break-even point is when the compounding benefits of appreciation + principal payoff overtake those frictional costs. Typical break-even for a reasonable home: 5-7 years. Faster-appreciating markets or low rent-to-price ratios can break even faster.
Common mistakes people make
Skipping maintenance (1-2% of home value yearly is realistic). Assuming home appreciation will match stock returns (it rarely does over multi-decade horizons — stocks have averaged 7-10%, homes 3-5% real). Forgetting opportunity cost on the down payment. Forgetting selling costs. Assuming a tax deduction that won't apply after you itemize vs. take the standard deduction.
Intangible factors
This calculator measures dollars, not feelings. Owning means you can paint walls, keep a dog, modify to your taste, and have stable housing costs. Renting means flexibility, freedom to move, zero repair headaches, and access to amenities you couldn't otherwise afford. The financial answer is important, but for most people it's not the only answer.
Frequently asked questions
When does buying usually beat renting?▾
Typically when you'll stay 5-7+ years, home appreciation at least matches rent inflation, and you'd otherwise pay roughly similar monthly cost. Shorter timelines make buying hard to win because closing + selling costs (5-10% of home value combined) dominate. Longer timelines give appreciation and principal payoff time to compound.
Why does the calculator factor in investment return?▾
Because if you rent, the down payment you would have used to buy is money you can invest instead. To do a fair comparison, we add up what that money would become in the stock market, and count it as a renting 'win'. This is called opportunity cost and it's the often-missed factor in rent-vs-buy debates.
What are the real costs of owning a home people forget?▾
Maintenance and repairs (1-2% of home value annually), property taxes (0.5-2.5% annually depending on state), insurance ($1,200-$3,000/yr), HOA fees ($0-$600+/mo if applicable), utilities you weren't paying as a renter, closing costs when buying and selling (5-10% combined), and mortgage interest (which in early years is most of your payment).
Should I buy if I can afford it just to build equity?▾
Not automatically. Equity building in early years is slow — a 30-year mortgage at 6% builds only ~1.5% equity the first year, with most of the payment going to interest. A stock market investment of the same down payment can easily outpace that early equity. The real buying argument is stability, control, and long-term inflation hedge, not 'equity' alone.
What about the tax deduction?▾
Mortgage interest deduction only helps if you itemize — which requires your itemized deductions to exceed the standard deduction ($15,750 single / $31,500 MFJ in 2026). For most middle-income buyers, the standard deduction is higher, making the tax benefit zero. For higher incomes in expensive homes, it can meaningfully reduce tax bills.
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