Rent vs. Buy Calculator
Compare the true long-term cost of buying a home against renting — including appreciation, closing costs, and the opportunity cost of the cash tied up in a down payment.
Results from this calculator are estimates provided for general informational purposes only, based on formulas, rates, and standards commonly accepted as of 2026. Figures may differ slightly from other calculators or professional sources due to rounding methods, differing assumptions, or regional regulations, and rules may change over time. Always consult a qualified professional — such as a financial advisor, healthcare provider, or other relevant specialist — before making decisions based on these results.
Better Choice for 7 Years
Renting
Saves you $10,827 over that time
Summary
Buying breaks even with renting after about 9 years. Over 7 years, renting comes out ahead by $10,827.
Break-Even Year
Year 9
Monthly Cost of Owning
$2,536.46
Monthly Cost of Renting
$1,815.00
Down Payment + Closing Costs
$80,500
Cumulative net cost of buying vs. renting over time
What is a Rent vs. Buy Calculator?
A rent vs. buy calculator compares the true financial cost of purchasing a home against renting an equivalent one, over however long you plan to stay. It's not just a monthly-payment comparison — a rent-vs-buy decision depends heavily on how long you stay, since the cost of buying and selling a house can be very high, often reaching 10% or more of the home's value between closing costs, agent commissions, and other transaction fees.
This calculator finds the break-even year: the point at which the equity you've built and the appreciation you've captured outweigh those upfront and ongoing costs of ownership, compared to the cost of renting and investing the difference instead.
How the Comparison Works
The buying side totals the down payment, closing costs, every mortgage payment, property tax, insurance, HOA dues, and maintenance over the years you stay — then subtracts the net equity you'd recover by selling (home value minus the remaining loan balance and selling costs). The renting side totals rent and renter's insurance, then subtracts the investment growth you'd earn by investing what would have been your down payment and closing costs instead of spending it on a home.
Whichever side has the lower net cost after your chosen number of years is the better financial choice — the calculator also tracks this year-by-year to find the break-even point where buying first becomes cheaper than renting.
PITI: The Four Core Costs of Owning
Principal, Interest, Taxes, and Insurance (PITI) are the four most significant costs of homeownership, typically listed in descending order by size. Principal is the only part that builds equity directly; interest is often tax-deductible; property taxes typically run 1%–3% of the home's value annually; and insurance — plus PMI if your down payment is under 20% — protects the lender's and your own stake in the property.
Why Length of Stay Matters So Much
The intended length of residence is probably the most critical variable in this decision. The upfront transaction costs of buying and selling are largely fixed regardless of how long you stay, so they get diluted over more years — the longer you stay, the more time appreciation and equity paydown have to outweigh those fixed costs, tilting the math firmly toward buying the longer the horizon.
The Investment Return Rate Represents Opportunity Cost
Renting's biggest hidden advantage is that the cash you'd otherwise sink into a down payment and closing costs stays liquid and can be invested elsewhere. Historically, home prices have appreciated only modestly after inflation — economist Robert Shiller found average inflation-adjusted home appreciation of just 0.2% over the long run, though nominal U.S. home values have typically risen 3%–5% a year. Since stock market returns have often exceeded mortgage rates historically, this opportunity cost can meaningfully favor renting, especially over shorter stays.
Example — Your Current Inputs
Buying breaks even with renting after about 9 years. Over 7 years, renting comes out ahead by $10,827.
Additional Example — A Short Stay Favors Renting
A buyer planning to relocate for work in just 2 years, considering a $300,000 home versus $1,600/month rent, will typically find renting far cheaper — the roughly $9,000-$15,000 in combined closing and selling costs alone rarely gets recovered through only 2 years of modest appreciation and equity paydown.
About These Parameters
- Home Price, Down Payment & Mortgage Rate
- These set your monthly principal and interest payment and your upfront cash needed. A larger down payment lowers your monthly payment but ties up more cash that could otherwise be invested if you rented instead.
- Property Tax, Insurance, HOA & Maintenance
- These recurring ownership costs have no equivalent for renters and add up significantly over time — property tax and maintenance especially scale with the home's value, so a pricier home costs proportionally more to maintain.
- Closing Costs, Selling Costs & Appreciation
- Closing costs are paid once, upfront; selling costs are paid once, at the end. Appreciation determines how much your equity grows in between — research recent comparable sales in your zip code for a realistic estimate rather than a national average.
- Rent, Rent Increases & Investment Return Rate
- Rent for a comparable home, how fast it's expected to rise annually, and the return you could earn by investing your would-be down payment elsewhere — together, these determine renting's true cost and its opportunity-cost advantage.
Frequently Asked Questions
Is this calculator's result a guarantee I'll save that amount?
No — like any financial projection, it's an estimate based on your input assumptions about appreciation, rent growth, and investment returns, which are inherently uncertain and can't precisely predict the future.
Does this account for the personal, non-financial reasons to buy or rent?
No — the numbers here can't reflect intangible factors like the stability and pride of homeownership, the flexibility of renting, or the hassle of dealing with a landlord. Treat this as one important input alongside those personal considerations, not the whole decision.
Why does a bigger down payment sometimes look worse for buying?
A larger down payment lowers your monthly mortgage payment, but it also increases the opportunity cost this calculator assigns to renting — the cash you didn't spend on a home could have been invested and grown at your assumed investment return rate.
What if the break-even year is beyond the chart range?
That means renting stays the cheaper option throughout the entire window shown — typically because rent is low relative to the home price, or the assumed investment return rate is high relative to home appreciation.