Rent vs. Buy Calculator
Should you rent or buy? Compare the true long-term cost of both options with a year-by-year analysis that accounts for home appreciation, rent increases, investment returns, and all the hidden costs of homeownership.
Your Scenario
$90,000 down · $360,000 loan
Your time horizon affects whether buying pays off
The Verdict
After 7 Years
Renting Wins
by $284,836 over 7 years
Break-Even Point
Within 7 years, renting stays cheaper
Buy Net Cost
$245,435
Rent Net Cost
-$39,401
Cumulative Net Cost Over Time
- Buying
- Renting
Net cost = total cash spent minus value retained (home equity + invested savings). Includes opportunity cost of investing unused funds. Estimates only — actual results vary.
Rent vs. Buy — Frequently Asked Questions
Is it better to rent or buy a home?
There's no universal answer — it depends on your local housing market, how long you plan to stay, your financial situation, and current interest rates. Buying typically makes financial sense if you plan to stay in the home for at least 5-7 years, allowing you to recoup closing costs and benefit from appreciation and equity building. Renting offers flexibility and lower upfront costs, and can be smarter in high-cost markets or if you expect to move soon. Our calculator compares both options side-by-side using your specific numbers — home price, rent, interest rate, appreciation, and time horizon — to show which comes out ahead and when the break-even point occurs.
What is the rent-vs-buy break-even point?
The break-even point is the number of years you need to own a home before buying becomes cheaper than renting. Before the break-even, renting is financially better because you haven't lived in the home long enough to offset the upfront costs of buying (down payment, closing costs) through equity building and appreciation. After the break-even, buying wins because your monthly housing costs stabilize (fixed mortgage) while rent continues to rise, and your home builds equity. Nationally, the break-even averages 5-7 years, but it varies widely by market. Our calculator shows your exact break-even year based on your inputs.
What costs are included in the buy calculation?
Our buy calculation includes: your down payment and purchase closing costs (estimated at 3% of home price), monthly mortgage principal and interest, property taxes, homeowners insurance, HOA fees if applicable, private mortgage insurance (PMI) if your down payment is under 20%, and home maintenance (estimated at 1% of home value annually). When you sell, we deduct selling costs (estimated at 8% of sale price for commissions and fees) and credit you the remaining equity. We also account for the opportunity cost — the money you tied up in your down payment could have been invested elsewhere.
What costs are included in the rent calculation?
The rent calculation includes your monthly rent payments (which increase annually based on your rent growth assumption) and renter's insurance. Crucially, we also account for the opportunity benefit of renting: the money you didn't spend on a down payment and closing costs remains invested and growing at your assumed investment return rate. Additionally, if renting is cheaper than buying in a given month, we invest that monthly savings difference too. This makes the comparison fair — both options account for every dollar's earning potential.
How does home appreciation affect the rent-vs-buy decision?
Home appreciation is one of the biggest factors in the rent-vs-buy equation. When your home appreciates, your equity grows — you owe the same mortgage but the property is worth more. Higher appreciation makes buying more attractive because you benefit from that value increase. Historically, US homes appreciate at about 3-5% annually, but this varies dramatically by location and market cycle. In hot markets, appreciation can push the break-even point earlier; in slow or declining markets, renting may win even over long time horizons. Use the appreciation slider to test different scenarios.
How does the time horizon affect whether I should rent or buy?
Your time horizon — how long you'll stay in the home — is critical. Buying has significant upfront costs (down payment, closing costs) that take years to recover through equity building and appreciation. If you sell too soon, those costs outweigh the benefits. The longer you stay, the more buying's advantages compound: your mortgage payment stays fixed while rent rises, you build more equity, and appreciation has time to work. This is why the break-even point is typically 5+ years. If you're unsure about your timeline or expect to move within 3-5 years, renting is usually the safer financial choice. Adjust the 'How Long Will You Stay?' slider to see how your horizon changes the outcome.
What investment return should I use?
The investment return represents what you could earn by investing the money you didn't spend on a home purchase (down payment, closing costs, and any monthly savings). The S&P 500 has historically averaged about 10% annually before inflation, or ~7% after inflation. A conservative assumption of 5-7% is reasonable for a balanced portfolio. Higher investment returns make renting more attractive because the opportunity cost of tying up money in a home is greater. Lower returns favor buying. Be realistic — don't assume returns you wouldn't actually pursue. This is a long-term comparison, so use a long-term average rather than recent performance.