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Rent vs Buy Calculator

Compare the true cost of renting vs buying a home. See break-even analysis and year-by-year comparison.

Buying Costs

$

Renting Costs

$

Return on down payment if invested instead

About Even
over 10 years
Buy Total Cost
$451,358
Rent Total Cost
$275,133
Break-even
Year 8
Final Equity
$261,055

Year-by-Year Comparison

YearBuy CostRent CostHome EquityNet Difference
1$115,848$24,000$95,148Rent +$2,300
2$151,959$48,720$110,876Rent +$3,956
3$188,343$74,182$127,210Rent +$4,955
4$225,006$100,407$144,179Rent +$5,284
5$261,958$127,419$161,811Rent +$4,933
6$299,208$155,242$180,137Rent +$3,888
7$336,763$183,899$199,189Rent +$2,137
8$374,633$213,416$219,002Buy +$330
9$412,829$243,819$239,611Buy +$3,525
10$451,358$275,133$261,055Buy +$7,458

Rent vs Buy: The Complete Picture

This decision involves more than just comparing mortgage to rent. Consider all costs and opportunity costs.

Costs of Buying

  • Mortgage payment: Principal and interest
  • Property taxes: 1-2% of home value annually
  • Insurance: Homeowners insurance required
  • Maintenance: Budget 1-2% of home value yearly
  • Opportunity cost: Down payment could be invested

Benefits of Buying

  • Building equity with each payment
  • Potential home appreciation
  • Tax deductions (mortgage interest, property tax)
  • Stability and control over your space

When Renting Makes Sense

  • Planning to move within 2-3 years
  • Expensive housing market (high price-to-rent ratio)
  • Job uncertainty or frequent relocation
  • Limited savings for down payment

When Buying Makes Sense

  • Planning to stay 5+ years
  • Stable income and job security
  • 20% down payment available
  • Good price-to-rent ratio in your market

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Frequently Asked Questions

Is it better to rent or buy?

It depends on how long you'll stay, local market conditions, your finances, and personal preferences. Generally, buying makes sense if you'll stay 5+ years.

What is the break-even point?

The number of years until buying becomes cheaper than renting. It varies based on home prices, rent, and investment returns.

What costs are included in buying?

Mortgage payment, property taxes, insurance, maintenance (1% of home value), and opportunity cost of down payment.

Does home appreciation matter?

Yes, significantly. 3% appreciation on a $400K home is $12K/year in equity gain, making buying more attractive.