Rent vs. Buy Calculator
Compare the true long-term costs of renting vs. buying a home and find your break-even point.
Compare the true long-term costs of renting vs. buying a home and find your break-even point.
Historical US average ~3-4% annually
Buying a home involves upfront costs (down payment, closing costs) and ongoing costs (mortgage, taxes, insurance, maintenance), but builds equity over time. Renting keeps capital liquid and avoids maintenance costs. The net buy cost subtracts the equity you accumulate — the true apples-to-apples comparison.
Net Buy Cost = Down Payment + Interest + Taxes + Insurance − (Home Value at Sale − Remaining Balance − Selling Costs − Down Payment)If you plan to move within 5 years, renting is often cheaper. Transaction costs (agent fees, closing costs ~6–8% of sale price) erode equity gains for short holding periods.
Over 10–20 years, buying typically wins as mortgage payments are fixed while rents rise with inflation. A paid-off home provides housing at dramatically lower cost than ongoing rent.
Analysis uses 30-year mortgage to determine payments. Selling costs assumed at 6%. Annual property tax estimated at 1.2% of home value; insurance at 0.5%. No HOA or maintenance included.