Rent vs Buy Calculator
Most rent vs buy calculators compare a mortgage payment to rent, which is the wrong comparison. This one compares where you actually end up: buying builds equity, renting frees the down payment to be invested. Find the year buying pulls ahead. Nothing is saved, and there is no email wall.
Over 7 years, renting and investing the down payment leaves you with more. Staying longer usually flips this.
Buying does not catch up inside your horizon at these numbers. Try a longer stay.
Mortgage, tax, insurance, HOA, and maintenance.
Down payment plus closing costs.
Home value after selling costs, minus what is left on the loan.
The invested down payment plus every month renting cost less than owning.
Estimates only, for education. This compares net worth on both paths, so the renter is credited with investing the down payment and any monthly savings. It does not model income taxes, the mortgage interest deduction, or rent control. Confirm every figure with a lender before you decide.
How to read the result
The breakeven year is the number to focus on. Buying starts in a hole: closing costs going in, agent commission coming out, and the first years of a mortgage are almost all interest. The breakeven year is when appreciation and principal paydown finally cover that hole. If you are not confident you will stay past it, renting is the lower-risk call.
The investment return field is where this calculator is honest with you. A renter who puts the down payment into an index fund is not standing still. Set that number to zero and buying will always look better than it is. Set it near your real long-run expectation and you get a fair fight.
Run it more than once. Drop appreciation to 2%, raise it to 5%, and watch the breakeven year move. If buying only wins under your most optimistic assumption, that is the answer. If you are weighing this because a rental would help cover the payment, the house hacking calculator models that directly, and house hacking for beginners explains the strategy. Not sure you have the down payment yet? Check the affordability calculator first.
Rent vs buy questions
Is it better to rent or buy?
It depends almost entirely on how long you stay. Buying carries large one-time costs at both ends: closing costs going in and agent commission coming out. Those costs need years of appreciation and principal paydown to absorb. Below roughly five years, renting usually wins. Past seven or eight, buying usually wins. This calculator finds your specific crossover year instead of guessing.
Why does this calculator compare net worth instead of monthly payments?
Comparing a mortgage payment to rent is the most common mistake in this decision. It ignores the equity a buyer builds and it ignores what the renter's down payment would have earned if invested. This calculator gives both paths the same starting cash, lets the renter invest what they do not spend, and compares where each one lands.
What is the breakeven point in rent vs buy?
It is the year your position as an owner passes what you would have had as a renter who invested the difference. Before that year, selling would leave you worse off than if you had rented. It is the single most useful number in this decision, because it turns a vague question into a date.
What assumptions matter most in this calculation?
Years you stay, home appreciation, and the investment return you assume for the renter. Small changes to appreciation and investment return swing the answer hard, which is why you should run the calculator two or three times with conservative numbers rather than trusting one optimistic pass.
Does this account for the mortgage interest deduction?
No. Since the 2017 standard deduction increase, most buyers take the standard deduction and get no tax benefit from mortgage interest at all. Including it by default would overstate the case for buying for the majority of people. If you know you itemize, treat the buying side as slightly better than shown.
What if your first home also paid you?
The 28-day course walks through buying a property where a tenant covers part of the payment, in order, with daily lessons and daily tasks. Or grab the free strategy guide to find the path that fits you.