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Rent vs Buy Calculator

Compare the true long-term cost of renting vs buying — including opportunity cost, appreciation, equity build-up, and your break-even year. Make the decision with real numbers.

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The rent vs. buy decision compares the true long-term cost of renting against purchasing a home — including the opportunity cost of your down payment, home appreciation, mortgage equity, maintenance, property taxes, and selling costs. The break-even point — where buying becomes cheaper than renting — is typically 4–7 years in most U.S. markets, though high-cost coastal cities often see break-even at 10+ years.

Last updated: 2026-05-04
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Renting Costs
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Home Purchase Costs
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Market Assumptions
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Return on down payment if renting

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How long you plan to stay in the home

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Rent vs Buy Results
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Enter your rent and target home price
to compare the true costs.

Rent vs Buy — FAQs

The real financial factors behind one of life's biggest decisions.

The rent vs buy decision is a financial comparison of the true long-term costs of renting a home versus purchasing one. It depends on your local market, how long you plan to stay, and your financial situation. Buying generally makes financial sense if you stay 5+ years, have a stable income, and have saved a down payment plus emergency fund. Renting makes sense if you need flexibility, plan to move soon, or if local home prices make the math unfavorable. This calculator finds the break-even point for your specific numbers — giving you a data-driven answer rather than a rule of thumb.

The break-even point is the year at which buying becomes cheaper than renting when accounting for all true costs — mortgage payments, property taxes, insurance, maintenance, closing costs, and the opportunity cost of your down payment — offset by equity buildup and appreciation. In most US markets, the break-even is 4–7 years. In expensive coastal markets with high price-to-rent ratios, it can be 10+ years. If you move before the break-even, renting was cheaper.

Opportunity cost is what you could have earned by investing your down payment instead of using it to buy a home. If you put $80,000 down and invested it in a diversified index fund at 7% instead, that money would grow to ~$157,000 in 10 years. This is a real economic cost of buying that most simple monthly-payment comparisons ignore. This calculator includes the investment return on the down payment as part of the renting total, making the comparison honest and complete.

Home appreciation is one of the most sensitive variables. At 3–4% annual appreciation (the US historical average), buying almost always wins over 10+ years. At 1–2% appreciation (stagnant markets), renting may be financially superior even over 15 years. In high-growth markets (5–7%), buying wins very quickly. Try changing the appreciation rate in the inputs by 1–2 percentage points and watch how dramatically the break-even shifts. For real estate investment math, see our Rental ROI Calculator.

Buying costs: mortgage principal and interest, property taxes (at current home value), homeowners insurance, PMI (if <20% down), maintenance (1% of home value annually), buying closing costs (2–5%), and selling costs (~6% at exit). Renting costs: monthly rent (with annual increases), renter's insurance, and opportunity cost of the down payment invested at your specified return rate. At exit, the home sale proceeds (net of selling costs) are credited back to the buyer's total cost.

Renting can build wealth — if you invest the difference between what renting costs and what buying would cost. The challenge is that most renters spend those savings rather than investing them. Buying enforces a form of forced savings through principal paydown. Studies consistently show homeowners accumulate substantially more wealth than renters over a lifetime, though part of this is selection bias (higher-income people buy). If you're disciplined about investing savings, renting can compete. Use our Investment Return Calculator to model the renting + investing scenario.

Homeowners can potentially deduct mortgage interest and property taxes if they itemize and their deductions exceed the 2025 standard deduction ($15,000 single / $30,000 married). With the high standard deduction, fewer homeowners benefit from this than in prior decades. The biggest tax advantage is the $250,000/$500,000 capital gains exclusion on home sale profits — gains up to those thresholds are tax-free for primary residences held 2+ years. Renters receive no home-specific tax benefits, but tax-advantaged investing via Roth IRA and 401k can partially compensate. See our Tax Estimator for your full tax picture.

Before deciding to buy, verify you can actually afford the home. Use our Home Affordability Calculator to find your maximum home price based on income, debt, and down payment using the 28/36 lending rule. Then use our Mortgage Amortization Calculator to see the full payment schedule, total interest, and the impact of extra payments on your payoff timeline.

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Disclaimer: This calculator provides estimates based on user-entered assumptions and general financial models. Results are for informational purposes only and do not constitute financial, legal, or real estate advice. Actual home appreciation, investment returns, tax treatment, and transaction costs vary significantly by location and circumstance. Consult qualified real estate, financial, and tax professionals before making buying or renting decisions.