Rent vs Buy Calculator
Should you keep renting or buy a home? This calculator compares the full financial picture — mortgage, taxes, appreciation, opportunity cost, and selling expenses — to find your break-even point.
| Year | Net Cost Buy | Net Cost Rent | Compare | Difference |
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How It Works
This calculator models the true financial cost of each path — buying and renting — over your chosen time horizon.
Buying Costs
Your monthly housing cost includes the mortgage payment (principal + interest), property taxes, insurance, HOA fees, and maintenance. However, part of your mortgage payment builds equity (principal), and your home may appreciate in value. These offset your cost.
Renting Costs
Rent is your monthly cost, but the money you would have used for a down payment stays invested and earns returns. The investment gains offset your rent.
Break-Even Analysis
The break-even year is when the cumulative net cost of buying becomes less than the cumulative net cost of renting. After this point, buying is the cheaper option. Selling costs (typically 5-7% of home value) are factored into the final year calculation.
Frequently Asked Questions
How long do I need to stay to make buying worth it?
Generally 5-7 years, but it depends heavily on your local market, mortgage rate, rent levels, and expected appreciation. Use this calculator with your specific numbers to find out.
Does this include mortgage interest tax deductions?
No. Tax benefits vary by individual situation. Consult a tax professional to factor in any applicable deductions.
What does "investment return on the difference" mean?
When renting, you typically have more disposable income each month (no mortgage, taxes, etc.). This setting assumes that surplus is invested at the given annual return rate.
Are selling costs included?
Yes. Home sale costs (agent commissions, closing costs, typically 5-7%) are deducted from the buyer's equity at the end of the comparison period.
Cash on Cash Return Calculator
Rental ROI projects five years; cash-on-cash focuses on the annual income your invested cash generates. Investors watch it to compare deals that need different down payments. Screen potential properties and stress your assumptions before you commit.
Cash on Cash Return Calculator — read more