Rent vs buy calculator
Whether buying a home or renting leaves you better off over the years you plan to stay.
About this calculator
Should you rent or buy? This calculator compares the two over the years you plan to stay, counting the mortgage, property tax, upkeep, rent increases and the cost of buying and selling.
It also invests whatever one option saves each month, so you see which leaves you wealthier and when buying breaks even.
How it works
Both paths start with the same cash. The buyer pays the down payment and buying costs, while the renter invests that money instead. Each month, whoever pays less invests the difference at the return on savings. At the end, the home is sold, less selling costs and the loan balance.
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Worked example
- Home price: $400,000
- Down payment: 20%
- Mortgage rate: 6.5% a year
- Loan term: 30 yr
- Monthly rent for a similar home: $2,200
- Years you plan to stay: 7 years
- Home price growth: 3% a year
- Rent increase: 3% a year
- Return on savings: 5% a year
- Property tax: 1.1% of value a year
- Maintenance: 1% of value a year
- Home insurance and HOA: $150 a month
- Buying costs: 3% of price
- Selling costs: 6% of price
Renting comes out ahead by: $11,353 (for 7 yr)
Common questions
Is it better to rent or buy?
It depends on how long you stay, prices, rents and interest rates. Buying usually needs several years to make up for the costs of buying and selling.
What is the break-even point?
The time after which buying leaves you with more wealth than renting and investing the difference. If you move before then, renting usually comes out ahead.
Why does the calculator invest the difference?
To compare fairly. Money not spent on a down payment or higher monthly costs could earn a return, so the renter's savings grow too.
Sources and further reading
The story behind it
Where the idea came from: In the United States, the share of households that own their home has stayed between about 63% and 69% since the 1960s.
Owning builds equity, but it ties up cash and brings costs that renters never see, from repairs to the fees of selling. Comparing both paths month by month shows when, if ever, buying pays off for you.
Why you can trust this calculator
- It runs in your browser. Nothing you type into it is sent anywhere.
- The method is explained on this page, so you can check it yourself.
- Free to use, with no sign-up.
- Results are estimates, not financial advice.
- Spotted a mistake? Tell us and we'll look into it.
After 15 years as a mathematics educator, I built CalculStore to give students, teachers, professionals and anyone working with numbers simple, reliable tools.
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