Rent vs Buy Calculator
Compare the true long-term cost of renting versus buying a home — including equity and the breakeven year — with a side-by-side chart.
Frequently Asked Questions
How does this compare renting and buying?
It tallies the net cost of buying (down payment, mortgage, taxes, maintenance, minus the home equity you build) against the total cost of renting (with annual rent increases) over your chosen period.
What is the breakeven year?
The year buying becomes cheaper than renting. Before it, renting is usually cheaper; after it, buying often wins as you build equity.
What does it leave out?
Closing costs, selling costs, and the opportunity cost of investing your down payment elsewhere. It is a simplified estimate, not advice.
Understanding the Rent vs Buy Calculator
The Rent vs Buy Calculator compares the long-run cost of renting a home against buying one over a holding period you choose. It weighs upfront and ongoing ownership costs - down payment, loan interest, property tax, maintenance and transaction fees - against rent paid plus what your down payment could have earned if invested. The output is an estimate to inform a personal decision, not advice to rent or buy; the right choice depends heavily on your local market, how long you stay and your assumptions.
How it works
Enter the home price, down payment, loan rate and term, expected home-price appreciation, current rent and rent growth, plus property tax, maintenance, and your investment return on money not spent on a down payment. The tool sums the net cost of each path over the holding period: for buying it adds purchase, financing and holding costs and subtracts the home's estimated resale value and equity built; for renting it adds rent paid and subtracts investment growth on the cash you did not tie up. Comparing the two net figures shows which is cheaper under your assumptions and where the break-even lies.
Worked example
Buy a $400,000 home with $80,000 down (20%) and a $320,000 loan at 6.5% over 30 years; you stay 7 years. Suppose interest plus property tax plus maintenance over those 7 years total about $140,000, and the home appreciates at 3% to roughly $492,000, leaving about $204,000 in equity after the remaining loan balance. Renting a similar home at $1,900/month rising 3% yearly costs about $178,000 over 7 years, while investing the $80,000 down payment at 7% grows to about $128,000. Over this short horizon the two paths are close; longer stays usually tilt the result toward buying as equity compounds. Note that this estimate excludes closing costs, selling costs and any capital gains tax, which can add 5-10% to the true cost of buying - so treat the figure as a guide rather than an exact total.
Tips & common mistakes
- The shorter your stay, the more buying is penalized by one-time transaction costs (closing costs, agent commissions, transfer taxes).
- Outcomes are highly sensitive to assumed home appreciation and investment return - test pessimistic and optimistic cases.
- Include all ownership costs: property tax, homeowners insurance, maintenance and any HOA dues, not just the mortgage payment.
- Non-financial factors matter - stability, freedom to move, and renovation control are not captured by cost alone.
- This is an educational estimate; consult a financial planner and verify local tax and closing-cost rules before deciding.
Sources & methodology
- • U.S. Consumer Financial Protection Bureau - buying vs renting considerations (https://www.consumerfinance.gov)
- • Freddie Mac - renting vs buying a home guidance (https://myhome.freddiemac.com)
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Reviewed by the TopOpenTools editorial team · Last updated June 2026. These tools provide general estimates for educational purposes only and are not financial, tax, insurance, investment, or medical advice. Verify important decisions with a qualified professional.