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Rent vs Buy Calculator

Compare the true total cost of buying versus renting over the years you plan to stay, including transaction costs, equity, appreciation, and the opportunity cost of your down payment.

$

Purchase price of the home you would buy.

%

Percent paid upfront. Below 20% adds PMI until the loan reaches 80% of the price.

%

Annual fixed mortgage rate.

years

Length of the mortgage.

years

The comparison horizon. Buying usually wins only if you stay long enough.

%

Annual home value growth. This swings the result a lot, so keep it realistic.

%

Upfront cost to buy, as a percent of the price.

%

Realtor commission and closing costs when you sell, as a percent of the sale price.

%

Annual property tax as a percent of the home value.

$

Annual homeowners insurance premium.

%

Annual upkeep as a percent of the home value.

$

Homeowners association dues, if any.

%

Annual PMI as a percent of the loan, charged when you put down less than 20%.

$

Starting monthly rent for a comparable place.

%

How fast rent rises each year.

$

Monthly renters insurance premium.

%

Annual return if you invest the down payment and closing costs instead of buying.

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Over this period

Renting is cheaper

Which path costs less over the years you plan to stay.

Cheaper by
$18,058.09
Total cost to buy
$165,763.94
Total cost to rent
$147,705.85
Buying breaks even
Not within the holding period
Mortgage payment (P&I)
$2,022.62
Home equity at sale
$173,100.82
Cumulative cost: buying vs renting

Assumptions

  • The calculator compares the total net cost of each path over the years you plan to stay, not just the monthly payment versus the rent.
  • Costs are accumulated year by year over the holding period. Each year, property tax and maintenance are based on the home value at the start of that year, PMI is based on the loan balance at the start of that year, the principal and interest come from the loan's amortization schedule, and rent is that year's grown amount. The mortgage rate is fixed for the full term.
  • Buying includes the down payment, closing costs, principal and interest, property tax, homeowners insurance, maintenance, HOA, and PMI when the down payment is below 20 percent.
  • Each year's buying cost is figured as if you sold at the end of that year. The net sale proceeds are the appreciated home value, minus selling costs (a percent of the sale price), minus the remaining loan payoff, and they are subtracted from the costs paid so far, so the buying cost reflects the equity you would walk away with.
  • Renting includes rent (growing each year) and renters insurance, offset by the investment gain on the same upfront cash the buyer spent on the down payment and closing costs, grown at your assumed investment return.
  • Only that upfront cash is modeled as invested for the renter. Month-to-month cash-flow differences are not separately reinvested. Because owning is usually costlier per month early on, this tilts the result slightly toward buying.
  • Property tax and maintenance scale with the appreciating home value, while insurance and HOA are held flat. PMI drops once the loan amortizes down to 80 percent of the original price, rather than running flat for the whole loan.
  • The break-even year is the first year the cumulative cost of buying drops to or below the cumulative cost of renting; it is blank if buying never catches up within the years you plan to stay. The verdict (buying is cheaper, renting is cheaper, or about the same) compares the two totals at the end of the period, and the cheaper-by figure is the size of the gap.
  • All figures are in nominal future dollars and are not discounted to today's dollars. Appreciation, rent growth, and the investment return are steady annual rates you set, and each result is rounded to the nearest cent.
  • Not modeled: the tax deductibility of mortgage interest or property tax, capital-gains treatment on a home sale, income tax on the renter's investment gains, moving costs, utility or security-deposit differences, and any change in these rates over time.
  • Results are highly sensitive to home appreciation, investment return, and rent growth, and small changes can flip the verdict. This is an estimate for educational purposes only, not financial, legal, or tax advice. Consult a qualified professional for guidance specific to your situation.

How it works

A fair rent-vs-buy comparison weighs the total cost of each path over the years you plan to stay, not just the monthly payment against the rent. Both paths start with the same cash. The buyer sinks it into the home; the renter invests it. At the end of the holding period we tally what each path actually cost.

Cost of buying = upfront cash + cumulative ownership costs − net sale proceeds

  • Upfront: the down payment plus closing costs to buy.
  • Ownership, each year: principal and interest (from the shared amortization engine), property tax and maintenance (both a percent of the appreciating home value), homeowners insurance, HOA, and PMI when the down payment is under 20%. PMI stops once the loan reaches 80% of the original price.
  • Net sale proceeds at the end: the appreciated value, minus selling costs, minus the remaining loan payoff. This is the equity you walk away with, and it offsets the cost of owning.

Cost of renting = cumulative rent and renters insurance − investment gain

  • Rent grows each year; renters insurance is included.
  • Investment gain is the key fairness term: if you rent, you do not spend the down payment and closing costs, so you invest them. That portfolio grows at your investment return, and its gain is subtracted from the cost of renting. Leaving this term out is the most common way calculators quietly favor buying. Here it is explicit and separable.

The break-even year is the first year the cumulative cost of buying drops below the cumulative cost of renting. Renting usually wins for a short stay (the buy and sell costs dominate); buying tends to win over a longer horizon as equity and appreciation build.

Worked example

$400,000 home, 20% down, 6.5% over 30 years, 3% appreciation, 3% buy and 6% sell costs, 1.1% tax, $1,800 insurance, 1% maintenance, $2,200 rent growing 3%, 5% investment return, held 15 years:

Buying

  • Upfront = $80,000 down + $12,000 closing = $92,000
  • Cumulative ownership costs over 15 years = $547,302.48
  • Appreciated value = $400,000 × 1.03^15 = $623,186.97; minus 6% selling costs and the $232,188.56 loan payoff = net sale proceeds of $353,607.19
  • Total cost to buy = $92,000 + $547,302.48 − $353,607.19 = $285,695.29

Renting

  • Cumulative rent and renters insurance over 15 years = $493,711.32
  • The $92,000 you did not put down, invested at 5% for 15 years, grows to $191,261.39, an investment gain of $99,261.39
  • Total cost to rent = $493,711.32 − $99,261.39 = $394,449.93

Buying is cheaper by $108,754.65 over 15 years, and it breaks even in year 7. Notice the two totals are apples to apples: each is cash paid for housing minus the wealth that path leaves you with, so the down payment’s opportunity cost is counted on the renting side.

Which way is the thumb on the scale?

This version invests only the upfront cash for the renter. It does not separately reinvest the month-to-month difference between owning and renting. Because owning is usually more expensive per month in the early years, the renter often has monthly savings that this model does not put to work. That omission tilts the result slightly toward buying. A reader should know the direction of the bias: if anything, real-world renting (with those monthly savings invested) looks a little better than shown here. Reinvesting the monthly difference is a planned refinement.

Sensitivity

The verdict is highly sensitive to three assumptions: home appreciation, investment return, and rent growth. Small changes can flip the result. Treat the output as the break-even point under your assumptions, not a prediction. When appreciation is uncertain, lower it; the honest answer to “should I buy?” is usually “it depends on how long you stay and what markets do.”

Edge cases

For a short holding period, buying may never break even, shown as “Not within the holding period.” With less than 20% down, PMI is added to ownership cost until the loan amortizes down to 80% of the original price, after which it drops off.

Sources

Frequently asked questions

Is it cheaper to rent or buy?
It depends mostly on how long you stay. Buying carries large upfront and selling costs, so renting is usually cheaper for a short stay, while buying tends to win over a longer horizon as equity and appreciation build. This calculator finds the break-even year for your numbers.
Why does this include the return on my down payment?
Because a fair comparison has to. If you rent instead of buying, the down payment and closing costs are not spent, so you can invest them. Leaving that out is the most common way rent-vs-buy calculators quietly favor buying. Here that investment gain is subtracted from the cost of renting.
What makes the result change the most?
Home appreciation, your investment return, and rent growth. Small changes in these assumptions can flip the verdict, so treat the result as a guide to the break-even point under your assumptions, not a certainty.

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Last reviewed June 2026. For education, not financial advice.