Rent vs Buy Calculator
Renting or buying? Compare total costs year by year and find the point where buying pulls ahead.
Comparison
How to use the rent vs buy calculator
- Enter your current monthly rent and how fast you expect it to rise each year.
- Enter the home price, down payment, mortgage rate, and loan term.
- Add property tax and insurance/maintenance as annual percentages of the home price.
- Set the comparison horizon — the calculator totals both paths and finds the break-even year.
Rent vs buy tips
The break-even point is the year when the cumulative net cost of buying (total payments and closing costs minus the equity you build) drops below the cumulative cost of renting — before that year, renting was cheaper; after it, buying wins. The single biggest lever is how long you stay: most buyers need 5–10 years for the upfront transaction costs (~3% closing costs at purchase, ~6% agent/closing fees at sale, plus early mortgage interest) to pay off. If you might move within three years, renting is almost always cheaper once you count transaction costs. Also compare monthly cash flow, not just net totals — a mortgage plus taxes and maintenance often exceeds rent in the early years even when buying wins long-term.
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Frequently asked questions
What is the break-even year?
The first year in which the net cost of buying (cash outflow plus closing costs, minus home equity built) becomes less than the cumulative cost of renting.
Does this include home price appreciation?
Yes — it models loan amortization (principal paydown), a conservative 2.5% annual home appreciation, 3% buyer closing costs, and 6% seller transaction costs.
Why is buying more expensive at first?
Upfront transaction costs (closing and selling fees) plus the fact that early mortgage payments are mostly interest mean buying starts behind renting for the first several years.
How accurate is this?
It is a planning estimate. Real outcomes depend on actual rent growth, maintenance surprises, and tax situations — use it for direction, not precision.