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 the Rent vs Buy Comparison Works
This calculator models the true financial cost of each path — buying and renting — over your chosen time horizon.
Haven't settled on a purchase price yet? Start with the home affordability calculator to find a price your income and debts can actually support before comparing it against renting.
Cost of Buying a Home and the Home Equity You Build
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.
To see that mortgage payment broken into principal and interest over the full loan term — and how extra payments would shrink it — use the mortgage amortization calculator.
Cost of Renting and the Opportunity Cost of Your Down Payment
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 Year and Selling Costs
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 every year's calculation, since each row shows what you'd walk away with if you sold at the end of that year.
When Renting Wins and When Buying Wins
Short horizons favor renting: selling costs and closing costs have little time to amortize, and the renter's invested down payment compounds at the investment return you enter above. Longer horizons favor buying: principal paydown builds home equity, appreciation compounds on the full home value, and rent growth raises the cost of renting each year. If you might move within 2-3 years, pay special attention to the Year 1-3 rows — a break-even beyond Year 7 usually means renting wins for your inputs.
If buying wins and you plan to hold the home as a rental later, carry the same purchase price and mortgage payment into the rental property ROI calculator to check monthly cash flow, cap rate, and 5-year ROI on that hold scenario.
Worked Example
A $400,000 home financed with 20% down at 6.5% over 30 years, compared against renting a similar home for $2,200/month (rent rising 3%/year) with the difference invested at 7%/year, over a 10-year horizon. Property tax runs $4,800/year, insurance $1,800/year, no HOA, maintenance is budgeted at 1% of the purchase price per year, the home is assumed to appreciate 3%/year, and selling costs are set at 6% of sale price.
Inputs Used
- Purchase Price: $400,000
- Down Payment: 20%
- Mortgage Rate: 6.5%
- Loan Term: 30 years
- Property Tax: $4,800/yr
- Insurance: $1,800/yr
- HOA: $0/mo
- Maintenance: 1% of price/yr
- Home Appreciation: 3%/yr
- Home Sale Costs: 6%
- Monthly Rent: $2,200
- Rent Growth: 3%/yr
- Investment Return: 7%/yr
- Years of Comparison: 10
Computed Result
- Monthly Cost of Buying: $2,906
- Initial Monthly Rent: $2,200
- Break-Even Year: Year 10
- Year 10 Net Cost of Buying: $192,641
- Year 10 Net Cost of Renting: $193,729
How to Read This Result
As a common rule of thumb, buying tends to become the cheaper option after roughly 5-7 years, though the exact break-even point depends heavily on your local market, mortgage rate, and assumed appreciation — it is not a fixed rule. In this example, break-even lands at Year 10, later than that rule of thumb, because home sale costs (6% of the home's value) are charged against the buyer's equity at every year of the comparison, not only the last one — so it takes most of the horizon's principal paydown and 3%/year appreciation to outweigh that drag against a renter's surplus compounding at 7%/year. By Year 10, the net cost of buying ($192,641) is only just below the net cost of renting ($193,729) — try lowering the investment-return assumption, or extending the comparison window above, to see how the break-even point shifts.
Rent vs Buy Calculator FAQs
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 in every year of the table, not just the last one, since each row shows what you'd net if you sold at that point.
Should I buy if I might move within a few years?
Usually not, unless the table shows an early break-even. Selling costs of 5-7% dominate short holds, so check the Year 1-3 rows above — if break-even lands beyond Year 7, renting is cheaper for your inputs. Try extending the comparison window to confirm.
Methodology, Review, and Limits
This rent vs buy comparison runs entirely in your browser from the inputs above — no data leaves your device. The math follows the standard rent-vs-buy method: net cost of buying (cash outflow minus equity at sale, net of selling costs) versus net cost of renting (rent paid minus investment gains on the unspent down payment). Figures were last reviewed September 2026. Read how PropCalc calculators work, the financial disclaimer, or contact PropCalc with a correction.