Rent vs Buy Calculator
Compare the real long-run cost of renting vs buying, including opportunity cost on your down payment.
Cumulative Net Cost Over Time
Why "Rent Is Throwing Money Away" Is Mostly Wrong
The popular wisdom that renting is wasted money ignores the substantial costs of ownership that don't build equity: mortgage interest (especially in early years), property taxes, insurance, maintenance, HOA, closing costs, and the opportunity cost of having tens of thousands of dollars tied up in a down payment instead of invested. For short-to-medium time horizons (less than 5-7 years), renting often wins financially.
What This Calculator Models
For buying: monthly mortgage payment, property tax, insurance, maintenance, and the equity you build (current home value − remaining mortgage balance, minus selling costs at the end). For renting: rent payments growing with inflation, but with the down payment + closing costs invested at the assumed return rate.
The Break-Even Time
The "break-even" is the year buying becomes cheaper than renting (or vice versa). Typical break-evens are 4-7 years in expensive coastal markets and 2-4 years in cheaper markets. The faster the home appreciates and the higher rent grows, the sooner buying wins. The higher your alternative investment return, the longer renting holds out.
Beyond the Math
Money isn't the only factor. Owning brings stability, freedom to renovate and (often) emotional satisfaction. Renting brings mobility, lower hassle and protection from major maintenance shocks. The financial answer is one input to a bigger decision.
Frequently Asked Questions
Should I include the mortgage interest tax deduction?
For simplicity this calculator doesn't. In the U.S. it only matters if your itemized deductions exceed the standard deduction — for most borrowers in cheaper homes that's no longer the case post-2017 tax reform.
What's a realistic home appreciation rate?
Long-run U.S. real home prices have appreciated roughly 1% above inflation; in nominal terms, about 3-4% per year over 30+ years. Hot markets can do much better short-term but mean-revert eventually.