Rent vs. Buy Calculator
Should you buy a home or keep renting? This compares both over the years you'll stay — your net worth either way, the break-even year, and the monthly cost — crediting the renter for investing the down payment.
Buy vs. rent over 10 years
Over 10 years, buying leaves you about $58,628 better off.
When buying pulls ahead
Buying overtakes renting in year 5. Stay past that and buying wins; leave sooner and renting was the cheaper call.
First-year monthly cost
Owning usually costs more per month at first — the payoff comes from building equity and from appreciation over time, not from a cheaper monthly bill.
Net worth, year by year
| Year | Buy | Rent | Difference |
|---|---|---|---|
| 1 | $61,714 | $87,891 | −$26,177 |
| 2 | $74,930 | $95,122 | −$20,192 |
| 3 | $88,672 | $102,163 | −$13,492 |
| 4 | $102,964 | $108,985 | −$6,021 |
| 5 | $117,986 | $115,707 | $2,279 |
| 6 | $134,317 | $122,844 | $11,473 |
| 7 | $152,050 | $130,420 | $21,630 |
| 8 | $171,286 | $138,464 | $32,822 |
| 9 | $192,131 | $147,005 | $45,127 |
| 10 | $214,700 | $156,071 | $58,628 |
Educational estimate. Results are highly sensitive to how long you stay, appreciation, and the return your cash could earn if invested instead — try a few assumptions.
It's a net-worth question, not a monthly one
The honest way to compare renting and buying isn't "mortgage vs rent" — owning almost always costs more per month once you add taxes, insurance, and upkeep. The real question is which path leaves you wealthier after the years you'll actually stay.
Buying builds equity and captures appreciation, but sinks money into closing and selling costs you never get back. Renting frees that cash to invest elsewhere. This calculator tracks both — the buyer's home equity and the renter's investment account — and tells you when, if ever, buying pulls ahead.
What tips the decision
How long you'll stay
The single biggest factor. Every extra year spreads the fixed buying costs thinner and adds equity, so time is buying's best friend.
The price-to-rent ratio
A cheap rent next to an expensive home favors renting; a high rent next to a modest price favors buying. It's the core trade-off.
Interest rates
A higher mortgage rate raises the cost of owning and pushes the break-even point out — sometimes by years.
Appreciation vs investment returns
Buying bets on home appreciation; renting bets on investing the difference. Whichever grows faster tilts the result.
Frequently asked questions
Is it better to rent or buy a home?
It depends most on how long you'll stay. Buying carries big upfront and selling costs, so it takes years of equity-building and appreciation to come out ahead. Stay only a few years and renting is often cheaper; stay long enough and buying usually wins. This calculator finds the break-even point for your specific numbers.
How does this calculator decide the winner?
It simulates both paths month by month and compares your net worth at the end. The buyer's cash goes into a down payment and closing costs and builds home equity; the renter invests that same cash instead. Whoever spends less on housing each month invests the difference. It's an apples-to-apples net-worth comparison, not just 'rent vs mortgage.'
What is the break-even point in rent vs buy?
It's the year at which buying's net worth overtakes renting's. Before it, renting has left you wealthier (you avoided closing/selling costs and invested the cash); after it, the equity and appreciation you've built put buying ahead. A common rule of thumb is 5+ years, but it varies a lot with price, rent, rates, and appreciation.
Isn't renting just throwing money away?
Not necessarily. Renting frees up the down payment and closing costs to invest elsewhere, and it avoids maintenance, property tax, and selling costs. This tool credits the renter with the investment return on that money — the true comparison is buying's equity versus renting's invested savings, and sometimes renting genuinely wins.
What assumptions matter most?
How long you stay is the biggest lever, followed by home appreciation and the return your cash could earn if invested instead. Interest rate, rent growth, and maintenance also move the answer. Because the result is sensitive to these, try a conservative and an optimistic case rather than trusting a single scenario.
Buying it as a rental instead?
If you're weighing a property as an investment rather than a home to live in, run the full numbers with the verdict.