Rent vs Buy Calculator

Few financial choices carry as much weight as renting versus owning, and the honest way to compare them is over a long horizon, typically anywhere from 5 to 30 years. The point of the comparison is to find your break-even year, the moment when the cumulative cost of buying finally drops below the cumulative cost of renting.

Both sides are added up year by year over the timeframe you choose: 5, 10, 15 or 30 years. The renting side is your monthly rent, raised each year by the rent increase you enter (3% by default). The buying side is the down payment, closing costs (3% of the price by default; Fannie Mae puts them at 2% to 5% of the mortgage amount), principal and interest on a 30-year loan, property tax (1.1% of the home's value a year by default), maintenance (1% of value a year by default) and a monthly amount for homeowners insurance and HOA dues ($150 by default), with tax and maintenance growing as the home appreciates at the rate you assume (3% a year by default). At the end, the home's value minus the loan balance still owed and the cost of selling (6% of the sale price by default; commissions are negotiable) is the equity you walk away with. Because the down payment and closing costs could have been invested if you rented, the return they would have earned (5% a year by default) is added to the cost of buying. Net cost of buying = everything paid − equity after selling + that forgone return. The break-even year is the first year in which the rent paid so far exceeds the net cost of buying up to then. Renter's insurance, tax deductions and investing any monthly difference between the two paths are left out.

Your inputs do most of the heavy lifting, so it helps to be conservative about rent growth and appreciation, where small assumptions compound into large swings. Money is only part of the picture too: renting offers flexibility, while ownership offers stability and control. The trap to watch for is leaning too hard on optimistic appreciation or thin maintenance numbers, which can make buying look better on paper than it proves to be in practice.