Precision Utility
Rent vs Buy
Calculator
Inputs
10
Horizon
30 yr
Should you rent or buy? Enter your local home prices, rent, and financial details to see a side-by-side comparison of the total cost of renting versus buying over your chosen time horizon. The calculator factors in mortgage payments, equity growth, home appreciation, property taxes, maintenance, and the opportunity cost of your down payment.
Property & Mortgage
Rent Details
Ownership Costs
Recommendation
—
Total Cost to Buy
$0
Total Cost to Rent
$0
Equity Built
$0
You Save
$0
Break-Even Analysis
Enter your details and calculate to see when buying becomes cheaper than renting.
How the rent vs buy calculator works
This calculator compares the true cost of renting versus buying a home over your chosen time horizon. It goes beyond the simple mortgage-payment-vs-rent comparison by factoring in all the costs and benefits of each option.
On the buying side, the calculator adds up mortgage payments, property taxes, homeowners insurance, and maintenance costs. It also accounts for the opportunity cost of your down payment — the returns you could have earned by investing that money elsewhere. Against these costs, it credits the equity you build through mortgage principal payments and home price appreciation.
On the renting side, it totals your monthly rent payments (increasing each year by the annual rent increase rate) plus a standard renter's insurance cost of $200 per year. The net cost of buying equals total payments minus equity gained. The net cost of renting equals total rent and insurance paid over the period.
Key factors in the rent vs buy decision
Time horizon is the single biggest factor. Buying involves large upfront costs (closing costs, down payment) that are amortized over time. The longer you stay, the more buying tends to win. Most buyers need 3 to 7 years to break even compared to renting.
Mortgage rates dramatically affect monthly payments. At 3% interest, a $240,000 loan costs $1,012/month. At 7%, that same loan costs $1,597/month — a 58% increase. Higher rates push the break-even point further out and can make renting the better option.
Home appreciation builds wealth for buyers but also increases property taxes and maintenance costs over time. The national average has been roughly 3-4% annually, but local markets vary significantly.
Opportunity cost of the down payment matters more than most people realize. A $60,000 down payment could grow substantially in a diversified investment portfolio. The calculator factors this in so you get a fair comparison.
What you need to know
This calculator uses a 30-year fixed mortgage for the buying scenario. It assumes you invest the down payment at a 7% annual return for the renting scenario's opportunity cost comparison. Renter's insurance is estimated at $200 per year.
Real-world costs not included: closing costs (typically 2-5% of purchase price), selling costs (5-6% in commissions), PMI if you put less than 20% down, HOA fees, and potential tax deductions from mortgage interest. These can shift the result in either direction depending on your situation.
Use this calculator as a starting point for your decision. The right choice also depends on lifestyle factors like flexibility, stability, and personal preference that no calculator can fully capture.
Frequently asked questions
How long does it take to break even on buying a home?
The break-even point typically ranges from 3 to 7 years, depending on home prices, mortgage rates, rent levels, and appreciation. If you plan to stay shorter than the break-even period, renting usually costs less. Use this calculator to find your exact break-even year.
What are the hidden costs of buying a home?
Beyond the mortgage, buyers pay property taxes (1-2% of value annually), homeowners insurance ($1,000-$3,000/year), maintenance and repairs (about 1% of value per year), HOA fees, closing costs (2-5%), and potential PMI if the down payment is under 20%.
When does renting make more financial sense than buying?
Renting often wins if you plan to move within a few years, live in a high-cost market with extreme price-to-rent ratios, have a small down payment, or if mortgage rates are significantly elevated. Renting also avoids large upfront costs and maintenance responsibilities.
What is the opportunity cost of a down payment?
It is the return you could have earned by investing the down payment in stocks or other assets instead of tying it up in a home. A $60,000 down payment invested at 7% annually would grow to about $84,000 in 5 years. This calculator accounts for that lost investment return.
What tax benefits come with buying a home?
Homeowners can deduct mortgage interest and property taxes if they itemize. Since the 2017 tax reform raised the standard deduction, fewer homeowners benefit from itemizing. The mortgage interest deduction applies to loans up to $750,000, and the SALT deduction is capped at $10,000.
How do closing costs affect the rent vs buy decision?
Closing costs run 2-5% of the home price upfront. When selling, you pay another 5-6% in commissions. These transaction costs make buying more expensive for short holding periods and push the break-even point further out. The longer you stay, the less impact per year.