How This Rent vs Buy Calculator Works
The calculator compares total rent payments with the net cost of buying a home. The buying side includes mortgage payments, taxes, insurance, maintenance, HOA, closing costs, selling costs, and estimated sale proceeds after remaining loan balance.
Rent vs Buy Break-Even Formula
Break-even is the first year when estimated buying cost becomes lower than estimated renting cost. The model checks each month up to 30 years using your rent growth, mortgage rate, appreciation, and ownership cost assumptions.
Costs People Forget When Buying
Many buyers compare rent only with principal and interest, but ownership also includes property tax, homeowners insurance, maintenance, repairs, HOA, closing costs, selling costs, and the opportunity cost of upfront cash.
Costs People Forget When Renting
Renting can include renter insurance, moving costs, broker fees, security deposit timing, and annual rent increases. Renting may also let you invest money that would otherwise be used for down payment and closing costs.
When Renting or Buying Usually Looks Better
How Mortgage Rates Change the Decision
Mortgage rates can change the rent vs buy result quickly because they affect the monthly payment and early-year interest cost. A one percentage point rate change can shift the break-even year, especially for high-price homes or low down payments.
Why Years to Stay Matters
Buying usually has higher upfront and exit costs. If you move soon, those costs may outweigh equity growth. If you stay longer, appreciation, principal payoff, and rent increases may make buying more competitive.