Rent vs. Buy Calculator
Renting isn't throwing money away, and buying isn't an automatic win — the right answer depends on how long you stay, the gap between rent and the all-in cost of ownership, and what your down payment would earn invested elsewhere. This calculator compares the two side by side on the same horizon.
The price of the house you'd buy.
What you'd pay to rent a comparable place today.
20% avoids PMI (private mortgage insurance) on a conventional loan.
Annual rate.
Owning rarely beats renting under ~5 years once selling costs are paid.
Over 5 years — assuming 3% home appreciation, 3% rent growth, and 6% return on what you'd otherwise invest.
$17,876 renting ahead
- Total cost to buy
- $139,662
- Total cost to rent
- $121,786
- Buy (avg / month)
- $2,328 / mo
- Rent (avg / month)
- $2,030 / mo
Free during pilot
How rent vs. buy compares
Rent-vs-buy isn't a single-number comparison — it's a comparison of two cash-flow paths over the same horizon. The calculator simulates both and reports the difference.
The "buy" path
- Up-front: down payment + 3% closing costs.
- Monthly: principal & interest from a standard 30-year amortization (how each monthly payment splits between interest and principal over time), plus monthly escrow estimated at 1% property tax + 0.9% insurance + 1% maintenance annually.
- At sale: home value grows at 3% per year, you pay off the remaining loan balance and 7% selling costs, and pocket the equity. That equity is subtracted from the total cost of ownership.
The "rent" path
- Up-front: the down payment + closing costs you don't spend get invested. They grow at 6% annually (a conservative long-run blended return).
- Monthly: rent paid each year, growing 3% annually.
- At the horizon: the investment gain is subtracted from total rent paid. That's the opportunity cost the "buy" path consumes.
Why the answer flips on stay length
Buying has high transaction costs on both ends — 3% to buy, 7% to sell. On a short horizon those costs swamp every other line. As stay length grows, appreciation and equity-building start to dominate, and buying pulls ahead. The crossover point is usually somewhere between 4 and 7 years depending on the rent/price ratio in your market.
What this calculator deliberately excludes
- Tax deductions. Mortgage interest and SALT deductions tilt the math toward buying for households that itemize, but they vary too much by income and filing status to plug into a generic calc.
- HOA / condo dues. Add manually as part of rent if you compare like-for-like.
- Local risk factors. Insurance volatility and disaster exposure — hurricanes, wildfire, flood — can swing the maintenance + insurance line dramatically in some markets.
Frequently asked questions
Is it better to rent or buy?
It depends on how long you stay, the gap between rent and the all-in cost of ownership, and what your down payment would earn invested elsewhere. This calculator simulates both cash-flow paths over the same horizon and reports the difference. Renting is not throwing money away, and buying is not an automatic win.
How many years until buying beats renting?
Buying carries high transaction costs on both ends — roughly 3% to buy and 7% to sell — which dominate on a short horizon. As your stay lengthens, appreciation and equity-building take over and buying pulls ahead. The crossover is usually between 4 and 7 years, depending on your market's rent-to-price ratio.
What assumptions does this calculator use?
Neutral long-term defaults: 3% home appreciation, 3% rent growth, 6% investment return on the down payment you would otherwise invest, 1% property tax, 0.9% insurance, 1% annual maintenance, 3% closing costs to buy, and 7% selling costs. Your actual numbers will differ — insurance especially can run much higher in coastal and disaster-exposed areas.
What does the rent-vs-buy comparison leave out?
It excludes mortgage-interest and property-tax deductions (which tilt toward buying for households that itemize), HOA and condo dues, and local risk factors like hurricane, wildfire, or flood exposure that can swing the insurance and maintenance lines. It is an estimate to frame the decision, not a buying recommendation.
Estimates only — not a buying decision. The comparison uses neutral long-term assumptions (3% home appreciation, 3% rent growth, 6% investment return, 1% property tax, 0.9% insurance, 1% annual maintenance, 3% closing costs to buy, 7% selling costs). Your actual numbers will differ — insurance can run materially higher in coastal and disaster-exposed areas, appreciation has been highly variable, and investment returns are not guaranteed. The comparison ignores mortgage-interest and property-tax deductions, which mostly favor buying for itemizers. Methodology last reviewed: May 26, 2026.