Rent vs Buy Calculator
Compare the total cost of renting versus buying a home over time. See breakeven year, equity buildup, and opportunity cost of your down payment.
Quick Answer
The rent vs. buy breakeven point is typically 5-7 years, depending on home prices, interest rates, and local rent growth. Buying makes financial sense when monthly mortgage payments (including taxes, insurance, and maintenance at roughly 1-2% of home value annually) are comparable to rent, and you plan to stay long enough to recoup closing costs (typically 2-5% of purchase price). The opportunity cost of a down payment invested in the stock market at ~7% annual returns must also be considered.
RRenting Costs
BBuying Costs
IInvestment Assumptions
About This Tool
The Rent vs Buy Calculator helps you compare the true financial cost of renting versus buying a home over time. It goes beyond the simplistic “rent is throwing money away” framing and looks at the full picture: mortgage payments, property taxes, insurance, maintenance, HOA fees, closing costs, equity buildup, and the opportunity cost of your down payment.
One of the most overlooked factors in the rent vs buy decision is opportunity cost. When you put $80,000 down on a $400,000 home, that money is no longer available to invest in the stock market, bonds, or other assets. This calculator models what that money could have grown to, giving you a more honest comparison.
How the Comparison Works
On the renting side, the calculator tracks cumulative rent payments over time, increasing annually by your specified rent increase rate. It also includes renter's insurance. On the buying side, it tracks mortgage payments (principal and interest), property taxes, homeowner's insurance, HOA fees, and maintenance costs. The net cost of buying subtracts equity buildup through principal payments, since that money is effectively yours.
The breakeven point is the year when the cumulative net cost of buying drops below the cumulative cost of renting. If you plan to stay shorter than the breakeven period, renting is likely more cost-effective. If you plan to stay longer, buying tends to win financially.
Key Factors That Shift the Result
Several inputs have an outsized impact on the result. A higher interest rate makes buying more expensive and pushes the breakeven point further out. A higher expected investment return makes renting more attractive since your alternative investments grow faster. Higher rent increases favor buying, while higher property taxes and HOA fees favor renting. Adjusting these inputs helps you see how sensitive the result is to your assumptions.
For a comprehensive framework to help you decide, read our complete guide: Rent vs Buy Decision Guide.