Rent vs. Buy Calculator
Enter a home price, mortgage rate and your rent to see which costs less over the years you'll stay, and the year buying starts to win. With the defaults ($400,000 home, 20% down, 6.5% rate, $2,200 rent), renting is cheaper for the first five years and buying pulls ahead from year 6.
What your down payment could earn if invested instead.
- Net cost of buying
- $153,595
- Net cost of renting
- $161,999
- Break-even year
- Year 6
Buying pulls ahead of renting around year 6 and stays ahead through year 7 at these inputs.
Use Left and Right Arrow, Home, or End to inspect data points.
Estimates only — not financial advice. They produce estimates based on the figures you enter and do not account for every fee, tax or change in rate.
- Buying assumes a 30-year fixed loan, property tax at 1.1% and maintenance at 1% of the home's value each year, $1,500 a year of insurance and 6% selling costs.
- Renting assumes rent rises 3% a year and the down payment is invested at the return you enter.
- Closing costs, PMI, HOA fees, tax deductions and renter's insurance are excluded.
The email includes this route only; calculator inputs are not attached.
Rent or buy: the default example, year by year
With the starting numbers — a $400,000 home bought with 20% down at 6.5% on a 30-year loan, against $2,200 a month in rent — the net cost of each option if you left at the end of the year works out like this. Year 1: buying $43,567, renting $21,600. Year 3: buying $81,727, renting $66,318. Year 5: buying $118,460, renting $113,103. Year 7: buying $153,595, renting $161,999. Year 10: buying $202,871, renting $239,379.
Renting stays cheaper for the first five years; buying pulls ahead from year 6 and stays ahead after that. Those figures assume 3% yearly appreciation and rent growth, a 6% return on the down payment if you rent instead, property tax at 1.1% and maintenance at 1% of the home's value each year, $1,500 a year of insurance and 6% selling costs. Change any of them above and the break-even year moves.
Why buying isn't automatically cheaper
Buying carries costs renting doesn't: closing costs, property tax, maintenance, insurance, and 5–6% to sell. Those are front- and back-loaded, so a short stay can't recover them. Appreciation and equity build over time, which is why the longer you stay, the better buying looks.
What moves the break-even year most
How long you stay matters most, because the 6% selling cost is paid once however long you own. After that come the gap between appreciation and the return you'd earn investing the down payment, and the mortgage rate: a higher rate means more of each early payment is interest, which builds no equity.
Rent is the other lever. If comparable rent is low relative to the price — a price-to-annual-rent ratio above about 20 — renting tends to win for longer. At the defaults, $400,000 ÷ ($2,200 × 12) is about 15, which is why buying catches up within six years.
What this calculator leaves out
It does not model the mortgage-interest or property-tax deduction (most households take the standard deduction, so neither changes their federal tax), PMI on down payments under 20%, closing costs on the purchase, HOA fees or renter's insurance. If those apply to you, add the yearly amount to the home price's carrying costs mentally, or lower the investment return to reflect them.