Rent vs. Buy Calculator
Is It Better to Rent or Buy?
Enter your rent, the home you are considering, and how long you plan to stay. We'll calculate the true cost of each option and find the break-even point.
= $35,000 down payment
Verdict · 7 Year Stay
Renting Saves $13,555
Over 7 years, renting saves you $13,555 compared to buying, even accounting for the break-even at year 9. Consider renting and investing the difference.
Break-Even Point
Year 9
After year 9, buying is cheaper than renting
After 7 Years
Net Cost of Buying
$176,252
≈ $2,098/mo
Net Cost of Renting
$162,697
≈ $1,937/mo
Buying cost = all payments + selling costs − equity. Renting cost = total rent − invested down payment growth.
Wealth Built After 7 Years
Buyer — Home Equity
$118,648
$430,456 home value
− $285,981 mortgage
− selling costs
Renter — Invested Portfolio
$56,202
$35,000 invested
at 7%/yr for 7 yr
Renter wealth assumes the full down payment was invested at the assumed market return. Buyer equity is net of selling costs.
Wealth Accumulation Over Time
True Monthly Cost of Buying
Cumulative Net Cost Over Time
Ready to make the move?
A licensed mortgage banker can lock in your rate, walk you through your options, and get you pre-qualified — so you can make an offer with confidence.
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Is It Better to Rent or Buy a Home?
This is one of the most debated questions in personal finance — and the honest answer is: it depends on how long you stay. Buying a home involves large upfront costs (down payment, closing costs) that take years to recover through equity and appreciation. Renting keeps your capital flexible and lets your down payment earn returns in the stock market.
Neither option is universally better. This calculator does the full math — including home appreciation, rising rent, opportunity cost on your down payment, maintenance, taxes, and selling costs — to show you exactly where the break-even point is for your specific situation.
How This Calculator Works
Net cost of buying
The calculator adds up everything you spend as a homeowner — down payment, closing costs, mortgage payments, property taxes, insurance, maintenance, and eventual selling costs — then subtracts the equity you have built (home value minus remaining loan). This gives you the true out-of-pocket cost of owning after accounting for what you get back when you sell.
Net cost of renting
The calculator adds up all rent paid over the period, with annual increases, then subtracts the opportunity cost — what your down payment would have grown to if invested in the stock market instead. This gives the renter credit for keeping their capital working rather than locking it into a home.
Break-even year
This is the year when the cumulative net cost of buying drops below the cumulative net cost of renting. Before the break-even, renting is cheaper. After it, buying wins. If you plan to stay past the break-even point, buying is the stronger financial move.
Key Factors That Shift the Math
How long you stay is the biggest variable
The break-even point on a typical home purchase is 4–7 years. If you move before that, renting almost always wins financially. If you stay 10+ years, buying usually pulls well ahead.
Home appreciation dramatically changes the outcome
A market appreciating at 5% per year builds equity much faster than one at 2%. In high-appreciation cities, buying can win even on shorter timelines. In flat markets, renting stays competitive much longer.
Opportunity cost is real but often underestimated
A $60,000 down payment invested in index funds at 7% annual return becomes $118,000 in 10 years. Renters who actually invest their down payment rather than spending it come out much better than those who just pay rent.
Maintenance adds up more than most buyers expect
The 1% rule — budgeting 1% of home value per year for maintenance — is a widely used estimate. On a $350,000 home that's $3,500 per year or nearly $300 per month in expected maintenance costs, which many first-time buyers overlook entirely.
Buying a Home as a Wealth-Building Tool
Beyond the cost comparison, homeownership is one of the most powerful wealth-building mechanisms available to everyday people — and it works in ways that renting simply cannot replicate.
Forced savings through equity
Every mortgage payment you make builds equity. Part of your payment reduces the principal balance, which is money you get back when you sell. Most renters do not consistently invest the equivalent amount — homeownership creates a form of forced savings that works even for people who are not naturally disciplined investors.
Leverage amplifies appreciation
When you buy a $350,000 home with a $35,000 down payment and the home appreciates 3% in a year, you gain $10,500 in value — on a $35,000 investment. That is a 30% return on your actual cash invested, even though the home only went up 3%. This leverage effect is unique to real estate and unavailable to renters.
Protection against inflation
Your mortgage payment is fixed (on a fixed-rate loan) while rent keeps rising with inflation. After 15–20 years, a homeowner paying the same mortgage they started with is getting a dramatically better deal every year, while renters face compounding rent increases with no end. This payment stability is itself a form of wealth preservation.
Tax advantages
Homeowners can deduct mortgage interest and property taxes, and when selling a primary residence, can exclude up to $250,000 ($500,000 for married couples) in capital gains from taxes. These tax advantages meaningfully improve the real return on homeownership compared to what the numbers alone suggest.
The renter's wealth path requires discipline
Renting can build equivalent or greater wealth — but only if the renter actually invests the down payment and the monthly savings (when rent is lower than buying costs) consistently over time. In practice, many renters spend rather than invest the difference. The wealth chart on this calculator shows the theoretical renter portfolio assuming perfect investment discipline. Your real results as a renter depend entirely on whether you follow through.
When Renting Makes More Sense
Renting is the smarter financial move when you plan to move within 3–5 years, when home prices are very high relative to rents (low price-to-rent ratio), when you have high-interest debt to pay off first, or when your income is variable and you need financial flexibility. Renting also makes sense if you are new to an area and want time to learn the neighborhood before committing.
When Buying Makes More Sense
Buying wins when you plan to stay 7+ years, when rents in your area are rising fast, when home prices are reasonable relative to rents, and when you are financially stable with a solid emergency fund and low consumer debt. Homeownership also provides stability, the ability to build equity, and protection against rising rents — benefits that go beyond the pure financial calculation.
This calculator provides estimates based on the assumptions entered and does not constitute financial advice. Real estate markets vary significantly by location. Consult a licensed real estate and mortgage professional before making a home purchase decision.
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