Rent vs Buy Calculator
Compare the true cost of renting versus buying a home. Factor in appreciation, opportunity cost, taxes, maintenance, and more to find your break-even point.
Your Situation
Buying Costs
Break-Even Analysis
Renting is cheaper for at least 30 years
With these assumptions, buying never catches up to renting + investing.
Monthly Cost Comparison (Year 1)
Renting
$2,000
per month
Buying
$2,848
per month (PITI + HOA + maintenance)
Wealth Accumulation Over Time
Wealth Summary After 7 Years
Renter Wealth
$231,373
Investment portfolio
Buyer Wealth
$189,045
Home equity (net of selling costs)
You Save
$42,328
by renting
Scenario Analysis
Break-even year under different market conditions
| Scenario | Home Appreciation | Investment Return | Break-Even Year |
|---|---|---|---|
| Optimistic | 5% | 5% | Year 5 |
| Base Case | 3.5% | 7% | Never (30+ yrs) |
| Pessimistic | 2% | 9% | Never (30+ yrs) |
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Understanding the True Cost of Renting vs Buying
The rent vs buy decision is one of the most important financial choices you'll make. It's not just about comparing your rent check to a mortgage payment — you need to account for all the hidden costs and the opportunity cost of your money.
What Renters Pay
Monthly Rent
Increases 3-5% annually in most markets
Investment Returns
Down payment money can be invested at 7-10% returns
What Buyers Pay (PITI+)
Principal & Interest
Fixed mortgage payment over 15 or 30 years
Taxes, Insurance, HOA, Maintenance
Adds 40-60% on top of your P&I payment
Closing + Selling Costs
3-5% to buy, 6-8% to sell (one-time)
Tips for Making the Rent vs Buy Decision
Consider Timeline
Plan to stay 5+ years? Buying usually wins. Moving in 2-3 years? Renting is likely cheaper after closing and selling costs.
Factor ALL Costs
Don't just compare rent to mortgage. Include taxes, insurance, HOA, maintenance, PMI, closing costs, and selling costs.
Don't Forget Opportunity Cost
Your down payment could earn 7%+ in the stock market. Factor in what that money would grow to over your time horizon.
Stage Before Selling
When you do buy and eventually sell, virtual staging helps your listing sell faster and for more — starting at $0.10/photo.
The Break-Even Analysis Explained
How We Calculate the Break-Even Point
Our calculator builds a year-by-year financial model comparing two paths: renting (and investing the money you would have spent on a down payment and cost savings) versus buying (building equity through mortgage payments and home appreciation).
The break-even year is when the buyer's net wealth (home value minus remaining mortgage and selling costs) surpasses the renter's net wealth (investment portfolio from the invested down payment and monthly savings). Before this point, renting is the better financial choice. After it, buying pulls ahead.
Key Factors That Shift the Break-Even
Favors Buying:
- • High home appreciation rates
- • Low mortgage interest rates
- • High rent and rising fast
- • Longer time horizon (7+ years)
Favors Renting:
- • High stock market returns
- • High property taxes and HOA
- • Short time horizon (<5 years)
- • Expensive markets (high price-to-rent ratio)
Frequently Asked Questions
When does buying a home make more financial sense than renting?
Buying typically makes sense when you plan to stay in the home for 5-7+ years, have a stable income, and can afford a 10-20% down payment. The longer you stay, the more you benefit from home appreciation and paying down your mortgage. In high-appreciation markets, the break-even point may be shorter. Use our calculator to find your specific break-even year.
What is opportunity cost in the rent vs buy decision?
Opportunity cost is the return you could earn by investing your money elsewhere instead of tying it up in a home. When you buy, your down payment and closing costs are locked in the property. If you rented instead, you could invest that money in the stock market, which has historically returned 7-10% per year. Our calculator factors in this opportunity cost to give you an accurate comparison.
What are the hidden costs of buying a home?
Beyond the mortgage payment, homeowners pay property taxes (0.5-2.5% of home value/year), homeowner's insurance ($1,000-$3,000/year), maintenance and repairs (1-2% of home value/year), HOA fees ($0-$500+/month), and PMI if you put down less than 20%. You also pay closing costs (2-5%) when buying and selling costs (6-8%) when you eventually sell.
How long does it take to break even on buying a home?
The typical break-even point is 4-7 years, but it varies widely based on your local market, interest rates, down payment, and investment alternatives. In expensive markets with slow appreciation, it can take 10+ years. In affordable markets with strong appreciation, it may be as short as 2-3 years. Our calculator computes your exact break-even year based on your specific inputs.
Should I rent or buy a home in 2026?
The answer depends on your personal situation: how long you plan to stay, local home prices and rent levels, current mortgage rates, your savings, and your risk tolerance. With 2026 mortgage rates around 5.5-7%, buying makes sense if you plan to stay 5+ years and can put 10-20% down. However, if you might move within 3 years or are in a very expensive market, renting and investing the difference may build more wealth.