Should you rent or buy? This calculator compares the long-term financial impact of renting versus buying a home. It accounts for mortgage payments, property taxes, maintenance, home appreciation, rent increases, and the opportunity cost of your down payment invested elsewhere.
Whether to rent or buy is one of the most consequential financial decisions most adults make, and it's also one of the most misunderstood. The popular framing "renting is throwing money away" obscures the fact that buying has equally large costs that disappear into property taxes, insurance, maintenance, mortgage interest, and the opportunity cost of a down payment that could have been invested elsewhere.
This calculator runs an honest head-to-head: total cost of buying (mortgage payments, taxes, insurance, maintenance, minus equity built and appreciation gained) vs total cost of renting (rent payments, minus growth on the down payment invested at market returns). The answer depends heavily on how long you stay, local price-to-rent ratios, mortgage rates, and assumed appreciation.
There is no universal answer. In high-priced coastal metros with price-to-rent ratios above 25, renting often wins financially for periods under 7–10 years. In affordable Midwest cities with ratios below 15, buying usually wins within 3–5 years. The point of this calculator is to find your specific break-even.
$350K home vs $1,800/mo rent. Price-to-rent ratio (price / annual rent) = 350,000 / 21,600 ≈ 16. Mortgage rate 6.5%, 30-year, 7% investment return. Break-even: ≈ year 5 (buying wins after this) At year 10: buying ≈ $25,000 ahead At year 30: buying ≈ $400,000 ahead A ratio in the mid-teens favors buying, especially with longer time horizons.
$800K home vs $3,200/mo rent. Price-to-rent ≈ 21. Same rates. Break-even: ≈ year 8–10 At year 5: renting ≈ $40,000 ahead At year 15: buying ≈ $150,000 ahead If you might leave within 5 years, renting is the cheaper bet. Mobility has financial value the standard "throwing money away" framing ignores.
Use this calculator before house-hunting, not after. The "should I buy" question is dominated by two variables you control: how long you'll stay, and how aggressively you invest the alternative cash.
The classic rule of thumb — "buy if you'll be there 5+ years" — comes from typical closing/selling costs of 8–10% of home value amortized over the holding period. Below 5 years those costs eat any equity gain. Above 7–10 years, even unfavorable price-to-rent ratios usually flip toward buying.
Non-financial factors matter too: stability of income, freedom to move for opportunity, desire to renovate, school zoning, and tolerance for being a part-time property manager. The numbers tell you the financial part of the decision, not the whole decision.
Calculate your monthly mortgage payment including principal, interest, taxes, and insurance.
Compare your current mortgage with a new loan to see monthly savings and break-even point.
Find out how much house you can afford based on your income, debts, and down payment.
Estimate closing costs when buying a home including lender fees, title, and prepaids.
Calculate your home equity and how much you could borrow with a HELOC.
Find out how much to save for a home down payment and how long it will take.
Percent of home value per year
Return on investing savings instead of buying
Verdict
Renting is better
Net Difference
$14,608.09
Home Equity
$232,997.58
Investment Balance
$247,605.67
| Year | Rent Costs | Buy Costs | Home Equity | Investments |
|---|---|---|---|---|
| 1 | $21,600.00 | $100,737.49 | $83,629.63 | $84,551.77 |
| 2 | $43,848.00 | $131,705.97 | $97,783.86 | $99,722.34 |
| 3 | $66,763.44 | $162,912.39 | $112,486.17 | $115,543.44 |
| 4 | $90,366.34 | $194,363.87 | $127,761.28 | $132,048.72 |
| 5 | $114,677.33 | $226,067.77 | $143,635.19 | $149,273.84 |
| 6 | $139,717.65 | $258,031.67 | $160,135.28 | $167,256.65 |
| 7 | $165,509.18 | $290,263.36 | $177,290.37 | $186,037.30 |
| 8 | $192,074.46 | $322,770.87 | $195,130.83 | $205,658.39 |
| 9 | $219,436.69 | $355,562.49 | $213,688.66 | $226,165.17 |
| 10 | $247,619.79 | $388,646.73 | $232,997.58 | $247,605.67 |