Rent vs Buy Calculator
Should you keep renting or buy a home? This calculator adds up the full cost of each side over the years you choose — rent, mortgage payments, taxes, insurance, maintenance and selling costs — and shows which one leaves you better off, and when buying starts to win.
Verdict Over 10 Years
How It Works
Comparing rent with a mortgage payment is the most common mistake in this decision, because the two numbers are not measuring the same thing. Rent is money gone: every dollar you pay leaves you with nothing to show for it. A mortgage payment is part cost and part savings — the interest, tax, insurance and upkeep are gone, but the principal part builds equity you get back when you sell, and the home itself may be worth more than you paid. This calculator compares the two sides honestly by adding up the total net cost of each over the same number of years.
On the renting side, it totals every month of rent, with rent rising each year by the growth rate you enter. On the buying side, it totals everything you pay — the down payment, closing costs, every mortgage payment, property tax, insurance, HOA dues and maintenance — and then subtracts the equity you would walk away with: the home's future value, minus selling costs, minus the mortgage balance still owed. Whichever side has the lower net cost wins. The calculator also finds the breakeven year: the first year in which buying becomes the cheaper option.
Worked Example
Take a renter paying $2,000 a month with rent rising 3% a year, against buying a $400,000 home with 20% down ($80,000), a 30-year mortgage at 7.11%, property tax of $4,800 a year, insurance of $1,800 a year, $200 a month of maintenance, $8,000 of closing costs, and 6% selling costs. The mortgage payment is $2,152.66 a month for principal and interest, plus $750.00 a month of tax, insurance and maintenance, for a total monthly outlay of $2,902.66 — noticeably more than the $2,000 rent. But over 10 years the picture flips. Total rent paid reaches $275,133.10. Buying costs $436,319.25 in cash out the door, but the home is worth $537,566.55 after 10 years of 3% appreciation, the mortgage balance has fallen to $275,306.04, and after 6% selling costs the equity recovered is $230,006.52. The net cost of buying is therefore $206,312.73 — $68,820.37 less than renting over the decade.
The timing matters as much as the total. In year 1, renting costs $24,000.00 while buying's net cost is $52,369.62, because the down payment and closing costs are still fresh. By year 3 the gap has narrowed to $74,181.60 of rent against $91,365.00 net buying cost. Year 5 is almost a dead heat — $127,419.26 of rent versus $127,845.10 for buying, a difference of just $425.84 — and in year 6 buying pulls ahead ($155,241.84 of rent versus $145,064.37). The breakeven year in this example is year 6: stay shorter than that and renting wins; stay longer and buying wins by more each year.
Assumptions
- Rent rises every year by the growth rate you enter (3% in the example). Real rent growth varies widely by city and year.
- The home's value rises every year by the appreciation rate you enter (3% in the example). Home values can fall, and a flat market changes the answer completely — see the table below.
- Property tax, insurance, HOA dues and maintenance stay constant. In reality all of them usually rise over time.
- The mortgage rate stays fixed for the full term, and you sell at the end of the comparison period, paying the selling-cost percentage you entered.
- Buying closing costs are paid once, up front, and are not financed into the loan.
What this calculator leaves out: it does not count the tax deduction on mortgage interest, which can help buyers who itemize; it does not count what the down payment could have earned if invested instead, which helps renters; and it does not count moving costs, renters insurance, or the value of flexibility. Treat the result as a planning comparison, not a prediction.
Appreciation is the single biggest swing factor. The table below shows the breakeven year for the worked example at different appreciation rates — everything else unchanged:
| Annual home appreciation | Breakeven year | What it means |
|---|---|---|
| 0% (flat market) | 18 | Buying only wins if you stay 18 years |
| 1% | 13 | A long stay is needed to come out ahead |
| 2% | 8 | Buying wins from year 8 onward |
| 3% | 6 | The worked example: buying wins from year 6 |
| 4% | 4 | Buying wins quickly |
| 5% | 3 | Buying wins almost immediately |
The lesson is blunt: in a flat market, renting can be the better financial choice for well over a decade, because the down payment, closing costs and selling costs are a heavy load to carry. In a rising market, buying wins much sooner. Never trust a rent-versus-buy answer that does not show you the appreciation assumption behind it.
How to Use This Calculator
Start with the renting side: your current monthly rent and the annual increase you expect. Then fill in the buying side with the home price, down payment, mortgage rate and term, and your best estimates for tax, insurance, HOA and maintenance. The two cost fields people most often forget are closing costs when you buy and selling costs when you leave — both are included here, and both are editable. Set the comparison period to how long you realistically expect to stay, then read the verdict: total rent paid, net buying cost, the difference, and the breakeven year. Download the CSV to see the comparison year by year.
Then stress-test the answer. Run it again with 0% appreciation, then with 5%. Try a shorter stay and a longer one. If buying only wins under optimistic assumptions, that is useful information — it tells you the decision depends on the market cooperating. If buying wins even with flat prices and a short stay, the case is much stronger.
Tips and Practical Advice
Match the comparison period to your real life, not to a round number. If there is a good chance you will move for work, family or any other reason within five years, the honest comparison period is five years — and in the worked example, renting wins at five years. The breakeven year is only useful if you actually stay past it.
Do not forget the cash-flow difference. Buying can be the better deal over 10 years while still costing $2,902.66 a month against $2,000 of rent. That extra money has to come from somewhere every single month, and a budget that cannot absorb it will not survive long enough to reach the breakeven year. Compare the monthly figures as well as the totals, and keep an emergency fund after the down payment.
Finally, remember that the financial answer is not the whole answer. Owning brings stability, control over your home, and freedom from a landlord's decisions; renting brings flexibility and freedom from repair bills and market risk. Use this calculator to price the financial side, then weigh the rest yourself.
Sources: Freddie Mac Primary Mortgage Market Survey, week ending Nov 12, 2026 (30-year fixed 7.11%). Rent growth and home appreciation defaults are assumptions, not forecasts — change them to match your market. Last reviewed: 13 November 2026.
Frequently Asked Questions
Is it cheaper to rent or buy a house?
It depends on how long you stay and how much the home appreciates. In the example on this page — $2,000 rent, a $400,000 home, 3% rent growth and 3% appreciation — renting is cheaper for the first five years and buying wins from year 6, saving $68,820.37 over 10 years. In a flat market the breakeven stretches to 18 years, so there is no universal answer.
How many years do you need to stay for buying to pay off?
There is no fixed number — it depends on your rent, the home price, the mortgage rate, closing and selling costs, and appreciation. This calculator finds your breakeven year from your own numbers. As a rough guide, buyers who stay less than five years rarely come out ahead, because closing costs and selling costs eat the early equity.
Does this calculator include closing costs and selling costs?
Yes. Buying closing costs are added to the cash you pay up front, and selling costs are deducted from the home's value when the equity is worked out. Both fields are editable — the defaults are $8,000 of closing costs and 6% selling costs.
Why is my monthly mortgage payment higher than my rent if buying wins?
Because a mortgage payment is not all cost. Part of each payment is principal, which builds equity you recover when you sell, and the home may appreciate. Rent is entirely cost. That is why the calculator compares total net cost over years, not monthly payments.
What if home prices fall instead of rising?
Then buying looks much worse. Set the appreciation rate to 0% to see the flat-market case, and remember that a fall in value would push the breakeven even further out. If you are buying in an uncertain market, run the numbers with 0% appreciation before deciding.
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