Rent vs Buy Calculator
The honest math on homeownership: total cost of buying versus renting over the years you actually plan to stay, with a plain-English verdict.
Last updated: October 2026
Your situation
Buying cost breakdown
| Item | Amount |
|---|---|
| Enter your details and click Compare. | |
How the comparison works
Most rent-vs-buy debates compare a monthly mortgage payment to monthly rent, which is misleading: the mortgage payment includes principal you get back as equity, while ownership piles on taxes, insurance, and maintenance that renters never see. This calculator compares total net cost over your planned stay instead.
Cost of buying = down payment + all mortgage payments + property tax + insurance + maintenance, minus the principal you repaid (it became equity), minus the home's appreciation gain (wealth you captured). Cost of renting = total rent paid over the same years, with rent rising at your assumed annual increase. Whichever total is lower wins.
The math behind the verdict
The mortgage payment comes from the standard amortization formula, and the principal repaid is found by amortizing the loan month by month over your stay period. Early in a 30-year loan, most of each payment is interest, which is why short stays punish buyers: you pay years of interest and build little equity.
Rent compounds too: at a 3% annual increase, a $2,200 rent becomes about $2,627 in year 7, and you will have paid roughly $202,000 total over those 7 years. Appreciation works the other way: at 3% a year, a $400,000 home gains about $92,000 in value over the same period, which is a large credit against the buying total.
Worked example
A $400,000 home, 10% down, 6.5% APR 30-year loan, staying 7 years, versus $2,200/month rent rising 3% a year. Home appreciates 3% a year; tax $4,800/yr, insurance $1,800/yr, maintenance 1% of value per year.
The mortgage payment is $2,275.44/month. Over 7 years you pay $191,138 in mortgage payments but repay only $34,502 of principal (the rest is interest), while the home gains $91,950 in value. Total net cost of buying: $178,886. Total rent paid: $202,289. Buying wins by $23,403 over 7 years, and leaves you with about $166,000 of equity.
Change the stay to 3 years and rerun it: the verdict flips, because you absorb the same upfront costs over far fewer months of equity building. Time horizon is the single biggest input.
The break-even horizon
Every buy-vs-rent comparison has a break-even point: the stay length where buying starts winning. It is usually measured in years, not months, because buying front-loads costs (down payment, and interest-heavy early payments) while its benefits (principal paydown, appreciation) accrue slowly. If there is a real chance you move within 3 to 5 years, renting is often the better financial choice even when the monthly payment looks similar.
What the model leaves out
To stay transparent and simple, the model excludes a few real costs: closing costs on purchase (typically 2 to 5% of the price), selling costs when you move (often 6 to 8% with realtor commissions), and the opportunity cost of the down payment (what it could have earned invested). It also holds tax, insurance, and maintenance flat instead of growing them. All of these tilt against buying, so treat the buying total as slightly optimistic, especially for short stays.
Rent vs Buy FAQs
Is renting just throwing money away?
No. Rent buys flexibility and avoids maintenance, property tax, insurance, and mortgage interest. Run your own numbers above: for short stays or pricey markets, renting frequently wins on total cost.
How long do I need to stay for buying to pay off?
It depends on your market, but the break-even point commonly lands around 5 to 7 years, because early mortgage payments are mostly interest and buying has large upfront costs. Try 3, 5, and 10 years in the calculator to see your own horizon.
Should the down payment count as a cost?
Yes for cash-flow purposes, since it is money you pay that could otherwise be invested. This model counts it as an upfront cost, then credits back the equity and appreciation you build, which keeps the comparison fair.
What about closing costs when I buy?
Closing costs typically run 2 to 5% of the purchase price and are not in this model. If you want to include them, add them to the down payment mentally: they are upfront cash that works exactly like a bigger down payment in the math.
Does the model include the cost of selling later?
No. Realtor commissions and seller closing costs often total 6 to 8% of the sale price. Because they are excluded, treat the buying side as slightly optimistic, and be extra cautious about buying if you might move soon.
What if home prices fall?
Set the appreciation rate to zero or a negative number to model flat or falling prices. Buying looks much worse without price growth, which reveals how much of the buy case depends on appreciation rather than the mortgage itself.
Where do HOA dues go?
There is no separate HOA field, so fold your annual dues into the maintenance percentage: divide yearly dues by the home price and add that percent to the maintenance field.
Do tax benefits of owning change the answer?
They can. If you itemize deductions, mortgage interest and property tax (up to the SALT cap) reduce your taxable income. The effect is biggest for high earners with large mortgages early in the loan; this model excludes it, so owners who itemize get a small extra edge in real life.
Would a 15-year mortgage change the verdict?
Yes, usually in buying's favor: the rate is lower and you build principal far faster, though the monthly payment is higher. Enter 15 as the loan term to see the difference for your situation.
What if I might relocate for work?
Uncertainty favors renting. Run the calculator at the shortest stay you consider plausible: if buying only wins at 10 years but you might move in 4, rent. Flexibility has real financial value that the numbers only partly capture.