Rent vs. Buy Calculator
"Should I keep renting or finally buy?" The honest answer isn't the monthly payment — it's the total cost over the years you'll actually stay, once you count equity, appreciation, and what renting-and-investing would have earned. This calculator runs both paths and tells you which one really wins.
Cumulative cost over time
Total money out of pocket each year — for buying, net cost counts your payments, taxes, insurance and HOA minus the equity you'd walk away with if you sold. The two lines crossing is roughly your break-even point.
How this calculator decides the winner
Most rent-vs-buy debates fixate on the monthly payment, but that's the wrong number. Renting and buying have completely different cost structures, so the only fair comparison is total net cost over the years you actually stay. Here's what each side of the ledger includes:
The cost of buying starts with your down payment and every mortgage payment, then adds property tax, homeowner's insurance and any HOA dues. Against that, we credit the equity you'd pocket if you sold at the end — your home's appreciated value, minus an estimated 6% in selling costs (agent commissions, transfer taxes, closing) and minus whatever mortgage balance is left after amortizing the loan over the months you owned it. Net cost of buying = everything you paid in, minus the equity you walk away with.
The cost of renting is the sum of your rent across the whole period, growing each year by your assumed rent increase. But a fair comparison gives the renter credit too: instead of tying up cash in a down payment, a renter can invest it. We grow that down payment at your expected investment return and subtract the gain. Net cost of renting = total rent paid, minus the investment growth on the money you didn't sink into a house.
Whichever path leaves you with the lower net cost "wins." The result above shows the gap so you can see how decisive — or how close — the call really is.
Rent vs. buy FAQs
It's the rough guideline that you should plan to stay in a home at least five years before buying makes financial sense. The logic: buying costs a few percent up front and selling typically costs around 6%, so you need several years of mortgage paydown and appreciation to recover those transaction costs. It's only a rule of thumb — in a cheap-to-buy, expensive-to-rent market the break-even can be shorter, and in pricey coastal markets it can be much longer. Use the slider above to find your break-even instead of trusting a generic number.
Not automatically. Owning builds equity two ways — you pay down principal each month, and the home may appreciate. But that equity can be wiped out by selling too early, flat or falling prices, high interest in the early years (when almost all of your payment is interest), and ongoing maintenance. A disciplined renter who invests the down payment and the monthly savings can sometimes match or beat a buyer, particularly where homes are expensive relative to rent.
It's the number of years at which buying becomes cheaper than renting-and-investing. On the chart above, it's roughly where the two cost lines cross. Before that point renting is usually ahead because you haven't recovered the transaction costs; after it, buying tends to pull away as appreciation and equity compound. If the lines cross well after the years you plan to stay, renting is the smarter financial move for you.
To stay readable it omits a few real costs and benefits. On the buying side: ongoing maintenance and repairs (often estimated at about 1% of home value per year), closing costs to purchase, PMI if your down payment is under 20%, and any mortgage-interest or property-tax deduction you'd get from itemizing. It also can't price the non-financial value of stability, the freedom of renting, or the time and stress of being your own landlord. Treat the output as a strong directional estimate — then sanity-check it against your real local numbers.