Rent vs Buy Calculator
Compare the real, all-in cost of renting versus buying over the years you plan to stay — including equity, appreciation, and the opportunity cost of your down payment — and see exactly when buying breaks even.
Inputs
Assumptions
Cheaper over 7 years
Renting
by $23,318
Net Cost — Buy
$225,607
Net Cost — Rent
$202,289
Break-Even
>7 yrs
Monthly to Own
$3,076
P&I $2,275
Cumulative Net Cost Over Time
Smart Insights
Over 7 years, renting is about $23,318 cheaper here — the upfront costs and money tied up in the home outweigh the equity you'd build in this timeframe.
Buying doesn't break even within 7 years in this scenario. Buying usually makes sense only if you'll stay long enough to recover the ~9% in buying and selling costs — often 5+ years.
The single biggest factor is how long you stay. Buying and selling costs (~3% + 6%) are spread over more years the longer you own, so a longer horizon strongly favors buying.
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How to Use This Calculator
Enter the home price, your down payment and mortgage rate, and the monthly rent for a comparable place. Set how many years you expect to stay — the single biggest factor — then adjust the assumptions for appreciation, rent increases, investment return, property tax, and maintenance. The chart plots the cumulative net cost of each path and marks the break-even year.
The Real Trade-Off
Buying is not automatically "throwing money away on rent" — ownership has its own sunk costs in interest, taxes, maintenance, and transaction fees. What buying adds is forced saving through equity and exposure to home appreciation. Whether that beats renting and investing the difference comes down to your time horizon and the assumptions you make. Use conservative numbers, and treat the result as one input to the decision alongside flexibility, lifestyle, and job stability.
Frequently Asked Questions
Is it better to rent or buy a home?
It depends mostly on how long you stay. Buying carries large upfront and selling costs (roughly 3% to buy and 6% to sell), so you need enough time for equity and appreciation to outweigh them. Renting is often cheaper over short horizons; buying tends to win the longer you stay.
What is the break-even point?
It is the year at which the cumulative net cost of buying drops below the cumulative net cost of renting. Before that year, renting is cheaper; after it, buying is. A common rule of thumb is around 5 years, but this calculator computes it from your actual numbers.
Why does the calculator include an investment return?
Money spent on a down payment and closing costs could otherwise be invested. The calculator charges buying an "opportunity cost" equal to the return that cash could have earned, so renting is compared fairly — otherwise buying would look artificially cheap.
What costs does buying include?
The down payment, closing costs (~3%), monthly principal and interest, property tax, maintenance and insurance, and selling costs (~6%) at the end. It then credits back your home equity — the appreciated value minus selling costs and the remaining loan balance.
What assumptions should I be careful with?
Home appreciation and investment return are the most sensitive. Small changes swing the result a lot, and neither is guaranteed. Try a conservative appreciation rate (2–3%) and a realistic investment return to stress-test your decision rather than assuming the best case.