Rent vs. Buy Calculator
Compare the true long-term cost of renting versus buying, including equity, appreciation, and opportunity cost.
Results over 10 years
Renting saves you
$22,487
compared to the alternative over 10 years
Net Cost to Buy
$229,385
Net Cost to Rent
$206,898
Home Equity (after costs)
$261,393
Break-Even
>10 yrs
Monthly Mortgage (P&I)
$2,335
Down Payment
$90,000
Assumes 2% closing costs, 2.1%/yr property tax + maintenance, 6% selling costs. “Invest Return” is the annual return on the down payment if invested instead.
How to Compare Renting vs. Buying
The rent vs. buy decision is one of the largest financial choices most people make, and the answer is rarely as simple as “buying is always better.” The true cost of homeownership extends well beyond the mortgage payment. This calculator accounts for the down payment, closing costs (typically 2% of the purchase price), monthly principal and interest, property taxes and maintenance (estimated at 2.1% of home value per year), and the 6% selling costs you'll pay when you eventually sell.
On the renting side, the key variable is the opportunity cost of your down payment. If you rent instead of buying, your down payment and closing costs stay in your pocket — and if you invest that money in a diversified index fund returning 7% annually, it compounds significantly over time. For example, a $90,000 down payment invested at 7% grows to about $177,000 in 10 years. That investment gain reduces the true net cost of renting when comparing the two options honestly.
The break-even yearis when the cumulative net cost of buying becomes lower than the cumulative net cost of renting. Before that point, renting is cheaper on a net basis. After it, the equity and appreciation you've built make buying the better deal. With today's mortgage rates and home prices, break-even often falls in the 8–15 year range for many markets — meaning if you plan to stay fewer than 7–8 years, renting is frequently the better financial choice even if home prices continue to appreciate.
Adjust the home appreciation and investment return rates to reflect your local market and risk tolerance. Higher home appreciation tilts toward buying; higher investment returns tilt toward renting. Pair this calculator with our Home Affordability Calculator to confirm how much house your income supports before comparing scenarios.
Frequently Asked Questions
Is it better to rent or buy right now?
It depends on your time horizon, local market, and finances. At current mortgage rates and home prices in most U.S. markets, renting is often cheaper on a net basis for people who plan to move within 7–10 years. If you plan to stay 10+ years, buying typically wins due to equity accumulation and a fixed mortgage payment (while rents keep rising). Run the numbers for your specific home price and rent to find your personal break-even.
What costs does this calculator include for buying?
The buying costs include: down payment, 2% closing costs, all monthly mortgage payments (P&I), property taxes and maintenance at 2.1% of home value per year, and 6% selling costs when you exit. Against these costs, it subtracts the net home equity you've built (home value minus remaining loan balance minus selling costs). This gives you the true net out-of-pocket cost of buying over your chosen time horizon.
What is opportunity cost in this context?
Opportunity cost is what your down payment could have earned if invested instead of used to buy a home. If you put $90,000 down on a house, that money is no longer available to invest in stocks or bonds. The calculator credits renters with the investment returns that down payment would have generated at your specified rate. This makes the comparison fair: renting isn't free, but neither is tying up a large sum in a down payment.
How accurate is the 2.1% property tax + maintenance estimate?
It's a reasonable national average but varies widely by location and home age. Property taxes range from under 0.5% in states like Hawaii to over 2% in New Jersey and Illinois. Maintenance costs average 1–2% of home value annually; older homes and custom builds trend higher. You can adjust your expected total by viewing the 2.1% as a baseline and considering whether your market runs higher or lower.
Why do I need to include an investment return rate?
Because the comparison isn't 'rent payment vs. mortgage payment' — it's two complete financial paths. In the buying path, your down payment is converted to home equity. In the renting path, that same money stays liquid and can be invested. Setting the investment return to 0% treats the down payment as sitting in a checking account, which understates the opportunity cost of buying. A reasonable long-term stock market return assumption is 6–8% annually.