Rent vs Buy Calculator
Should you rent or buy? It comes down to how long you stay. This tool compares the true net cost of each — counting home equity, appreciation, and the return a renter earns by investing the down payment — and tells you your break-even year. Instant, no sign-up, method shown.
Costs, growth & assumptions
Net cost over time — buy vs rent
Blue = buying, green = renting. Where blue drops below green is your break-even year.
Who wins at each horizon
The same inputs, judged over different lengths of stay.
| Stay | Net cost buying | Net cost renting | Winner |
|---|
The method — with your numbers
We compare net cost, not just monthly payment:
Lower net cost wins. The renting side credits the return earned by investing the buyer's upfront cash, so the comparison is fair.
How to use this rent vs buy calculator
- Length of stay. This is the biggest driver — set how many years you realistically expect to keep the home.
- Price, down payment, rate, rent. Enter the home you'd buy and the rent for a comparable place.
- Open assumptions to tune taxes, appreciation, rent growth and your expected investment return.
What your result actually means
Buying front-loads costs (down payment, closing) but builds equity and benefits from appreciation, so it wins if you stay long enough. Renting keeps you liquid and lets you invest the down payment, so it often wins over short stays. The break-even year is the honest answer to "should I buy?" — it depends far more on how long you'll stay than on the monthly payment alone.
Frequently asked questions
Why does length of stay matter so much?
Because buying's upfront and selling costs are spread over the years you own. Sell too soon and those costs dominate; stay long and equity plus appreciation overtake renting.
What assumptions does this make?
It credits the renter with investment growth on the down payment and closing costs, and values the home at sale net of selling costs and the remaining loan. It does not model income-tax deductions or reinvesting month-to-month cash-flow differences — kept simple and transparent on purpose.
What appreciation and return should I use?
Long-run U.S. home appreciation has often run near 3–4% and diversified investing near 6–7%, but both vary widely by market and era. Try conservative figures to stress-test the decision.
Method & sources
- Calculation: Month-by-month simulation of ownership carrying costs and mortgage amortization vs cumulative rent, netted against home sale equity and investment growth on the down payment.
- Simplifications (disclosed): excludes mortgage-interest tax deductions and reinvestment of monthly cash-flow differences; property tax/insurance/maintenance modeled as a percentage of home value per year.
- Reviewed: · Assumptions reviewed quarterly.
Educational estimate, not financial advice. Housing and investment returns vary and can be negative.