Rent vs Buy Calculator
Compare the true cost of renting versus buying a home and find your break-even point.
Home Purchase Details
Home Price
$
Down Payment
$
Mortgage Rate
%
Loan Term
▼
Property Tax Rate
%
Home Insurance (Annual)
$
HOA / Month
$
Maintenance Rate
%
Rental Details
Monthly Rent
$
Rent Increase / Year
%
Renter’s Insurance (Annual)
$
Market Assumptions
Home Appreciation
%
Investment Return
%
Time Horizon
▼
Your Analysis
Over 7 Years
Buying is Better
You could save $0
Total Cost to Buy
$0
Net worth: $0
Total Cost to Rent
$0
Net worth: $0
Cost Comparison
Cumulative Cost Over Time
Year 0
Year 3
Year 7
Buying
Renting
Buying Cost Breakdown
Mortgage Payments$0
Property Taxes$0
Home Insurance$0
HOA Fees$0
Maintenance$0
Down Payment Opp. Cost$0
– Home Equity Gained-$0
– Home Appreciation-$0
Net Cost of Buying$0
Renting Cost Breakdown
Total Rent Paid$0
Renter’s Insurance$0
– Investment Returns-$0
Net Cost of Renting$0
How the Calculation Works
This calculator compares the true cost of homeownership against renting by accounting for all expenses and wealth-building factors:
Net Cost to Buy = (Mortgage + Taxes + Insurance + HOA + Maintenance + Opportunity Cost) − (Equity + Appreciation)
Net Cost to Rent = (Rent + Insurance) − Investment Returns
Net Cost to Rent = (Rent + Insurance) − Investment Returns
The break-even point shows when buying becomes more cost-effective than renting, factoring in equity buildup and home appreciation.
Key Factors in Your Decision
- Time horizon: The longer you stay, the more likely buying becomes advantageous due to equity buildup.
- Opportunity cost: Your down payment could earn returns in the stock market (~7% historically).
- Home appreciation: U.S. homes average 3-4% annual appreciation, but varies by market.
- Hidden costs: Owners pay maintenance (1% of home value), taxes, insurance, and potential HOA fees.
When Renting Often Wins
- Short-term stays: If you’ll move within 3-5 years, transaction costs make buying expensive.
- High-cost markets: In cities where price-to-rent ratios exceed 20, renting often makes sense.
- Career flexibility: Renting allows easier relocation for job opportunities.
- Low rent areas: If rent is significantly below equivalent mortgage payments.
When Buying Often Wins
- Long-term commitment: Plan to stay 7+ years to recoup transaction costs.
- Building wealth: Each mortgage payment builds equity, unlike rent.
- Tax benefits: Mortgage interest and property taxes may be deductible.
- Stable housing costs: Fixed-rate mortgages protect against rent increases.