Should you rent or buy a home?
Rent vs Buy Calculator
Compare the true financial cost of renting versus buying over your chosen timeframe. This calculator accounts for mortgage payments, property appreciation, opportunity cost, and investment returns.
Enter your details
Buying costs
Renting & comparison
Rate on invested down payment
Over 10 years, our analysis suggests:
⚖️ It's roughly a toss-up
Renting and investing the down payment produces $328,378 vs $361,950 home equity.
Break-even point: Year 1
Buy: net equity
$361,950
After 10 years
Rent: invested net worth
$328,378
Down payment invested
Break-even
Year 1
When buying overtakes renting
Net worth comparison over time
View year-by-year breakdown
| Year | Buy equity | Rent portfolio | Buy advantage |
|---|---|---|---|
| Year 1 | $111,991 | $110,633 | +$1,357 |
| Year 2 | $134,993 | $131,918 | +$3,075 |
| Year 3 | $159,055 | $153,874 | +$5,181 |
| Year 4 | $184,231 | $176,526 | +$7,705 |
| Year 5 | $210,575 | $199,895 | +$10,680 |
| Year 6 | $238,144 | $224,006 | +$14,138 |
| Year 7 | $267,001 | $248,884 | +$18,117 |
| Year 8 | $297,208 | $274,554 | +$22,654 |
| Year 9 | $328,834 | $301,042 | +$27,792 |
| Year 10 | $361,950 | $328,378 | +$33,573 |
How this calculator works
The rent vs buy decision is one of the most significant financial choices most people make. The answer isn't simple — it depends on how long you plan to stay, your local market, available investment alternatives, and personal priorities.
On the buying side, your costs include mortgage principal and interest, property taxes, homeowner's insurance, maintenance (typically 1% of value annually), closing costs, and potentially PMI. Against these costs, you build equity through both mortgage paydown and property appreciation.
On the renting side, you avoid ownership costs but pay rent that typically increases annually. Critically, if you rent instead of buying, you still have your down payment available to invest. This calculator assumes you invest the down payment (plus any monthly savings from renting vs buying) and models what that portfolio would be worth over time.
The break-even point is when buying becomes net financially superior to renting. In markets with high home prices and low rents, break-even can take 10+ years. In markets with reasonable price-to-rent ratios, it can be as few as 3–5 years.
Worked example
- 1Buying: Monthly P&I $2,395 + tax + insurance ≈ $3,100/month
- 2Renting: $2,200/month growing 3% annually
- 3Down payment ($90,000) invested at 7% grows to ≈ $177,000
- 4Home appreciates from $450K to ≈ $666K; equity ≈ $330K
- 5Net buying advantage after 10 years: ≈ $153,000
Frequently Asked Questions
Related Calculators
Disclaimer: Calculations are estimates for informational purposes only and do not constitute financial advice. Rates, taxes, and costs vary by state and lender. Consult a licensed mortgage professional before making financial decisions.