Rent vs Buy Calculator
Compare what renting and buying leave you with, year by year. Every figure is an assumption you can change, and the method is shown below.
Private by design. Your numbers stay on this device.
Educational estimates only. Not financial, tax, or lending advice.
Published
Is it cheaper to rent or buy?
It depends on how long you stay and on figures nobody can know in advance, such as rent growth and home values. On the starting assumptions below, buying trails renting for the first 5 years 4 months because of closing and selling costs, then pulls ahead. After 10 years buying leaves $235,151 and renting leaves $181,947.
Those are made-up inputs, not a forecast. Change them to yours and the answer changes with them.
Renting or buying, on these assumptions
Break-even
5 years 4 months
When buying pulls ahead and stays ahead through year 30.
Buying vs renting, year 10
$53,204
Buying leaves you with more.
If you buy
$235,151
Home value minus the loan and selling costs, plus anything invested.
If you rent
$181,947
The down payment and buying costs, invested, plus monthly savings.
Anyone with this link sees these numbers. They sit in the link after the #, which browsers never send to a server, so sharing it transmits nothing to this site or anyone else’s. Nothing goes into a link until you click Share.
In the first month, owning costs $2,814 ($2,023 of it principal and interest) against $2,400 of rent. Both paths start with $92,000: the down payment and buying costs. For the payment alone, see the mortgage calculator.
What you would have, year by year
- Buy
- Rent and invest
Year by year
| Year | Rent paid so far | Owning costs so far | Home value | Loan left | Buy | Rent | Buying ahead by |
|---|---|---|---|---|---|---|---|
| 1 | $28,800 | $42,195 | $412,000 | $316,423 | $70,857 | $101,684 | -$30,828 |
| 2 | $58,464 | $72,435 | $424,360 | $312,607 | $86,291 | $111,261 | -$24,969 |
| 3 | $89,018 | $102,713 | $437,091 | $308,535 | $102,330 | $120,706 | -$18,376 |
| 4 | $120,488 | $133,021 | $450,204 | $304,191 | $119,001 | $129,996 | -$10,995 |
| 5 | $152,903 | $163,349 | $463,710 | $299,555 | $136,332 | $139,102 | -$2,770 |
| 6 | $186,290 | $193,688 | $477,621 | $294,609 | $154,355 | $147,998 | $6,357 |
| 7 | $220,679 | $224,025 | $491,950 | $289,332 | $173,101 | $156,652 | $16,449 |
| 8 | $256,099 | $254,350 | $506,708 | $283,701 | $192,604 | $165,032 | $27,573 |
| 9 | $292,582 | $284,648 | $521,909 | $277,693 | $213,083 | $173,283 | $39,799 |
| 10 | $330,160 | $314,904 | $537,567 | $271,283 | $235,151 | $181,947 | $53,204 |
| 11 | $368,865 | $345,104 | $553,694 | $264,444 | $258,910 | $191,045 | $67,865 |
| 12 | $408,730 | $375,228 | $570,304 | $257,146 | $284,465 | $200,597 | $83,868 |
| 13 | $449,792 | $405,258 | $587,413 | $249,360 | $311,930 | $210,627 | $101,303 |
| 14 | $492,086 | $435,173 | $605,036 | $241,053 | $341,422 | $221,158 | $120,264 |
| 15 | $535,649 | $464,950 | $623,187 | $232,189 | $373,069 | $232,216 | $140,853 |
| 16 | $580,518 | $494,564 | $641,883 | $222,731 | $407,002 | $243,827 | $163,176 |
| 17 | $626,734 | $523,989 | $661,139 | $212,640 | $443,364 | $256,018 | $187,346 |
| 18 | $674,336 | $553,196 | $680,973 | $201,873 | $482,304 | $268,819 | $213,485 |
| 19 | $723,366 | $582,153 | $701,402 | $190,385 | $523,979 | $282,260 | $241,719 |
| 20 | $773,867 | $610,825 | $722,444 | $178,128 | $568,556 | $296,373 | $272,183 |
| 21 | $825,883 | $639,176 | $744,118 | $165,050 | $616,214 | $311,192 | $305,022 |
| 22 | $879,459 | $667,167 | $766,441 | $151,096 | $667,138 | $326,751 | $340,387 |
| 23 | $934,643 | $694,752 | $789,435 | $136,207 | $721,527 | $343,089 | $378,439 |
| 24 | $991,482 | $721,887 | $813,118 | $120,321 | $779,591 | $360,243 | $419,348 |
| 25 | $1,050,027 | $748,521 | $837,511 | $103,372 | $841,551 | $378,255 | $463,296 |
| 26 | $1,110,328 | $774,598 | $862,637 | $85,287 | $907,642 | $397,168 | $510,474 |
| 27 | $1,172,437 | $800,061 | $888,516 | $65,991 | $978,112 | $417,027 | $561,085 |
| 28 | $1,236,411 | $824,847 | $915,171 | $45,403 | $1,053,223 | $437,878 | $615,345 |
| 29 | $1,302,303 | $848,887 | $942,626 | $23,436 | $1,133,253 | $459,772 | $673,481 |
| 30 | $1,370,172 | $872,107 | $970,905 | $0 | $1,218,496 | $482,760 | $735,736 |
Owning costs are interest, mortgage insurance, tax, insurance, HOA dues, upkeep and the cost of buying. Principal is left out because it builds equity rather than being spent. The year you plan to stay is outlined.
The assumptions behind this result
- Rent
- $2,400 a month, rising 3% a year
- Home
- $400,000, 20% down, 6.5% over 30 years
- Property tax
- 1% of the home's value each year
- Insurance and HOA
- $1,500 a year and $0 a month, rising 3% a year
- Mortgage insurance
- 0.55% of the loan a year while the loan is above 80% of the price
- Upkeep
- 1% of the home's value each year
- Home value
- 3% a year
- Costs to buy and sell
- 3% of the price to buy, 6% of the sale price to sell
- Investment return
- 5% a year on money not spent on the home, before tax
- Time in the home
- 10 years
Nothing here is a forecast. Rent, home values, tax bills and investment returns all move, and the result moves with them. Taxes, including the mortgage interest deduction and tax on investment gains, are left out.
How the comparison works
Both paths start with the same cash and spend the same amount each month.
The buyer pays the down payment and buying costs on day one. Each month the buyer pays principal and interest, property tax, insurance, HOA dues and upkeep. At any point the buyer’s wealth is the home’s value, minus the loan still owed, minus the cost of selling.
The renter keeps the down payment and buying costs and invests them, then pays rent. When owning costs more than rent in a month, the renter invests the difference. When renting costs more, the buyer invests it. So the two paths always spend the same each month, and the only thing that differs is where the money ends up. Both portfolios earn the same assumed return.
The loan comes from the same engine as the mortgage calculator, so the payment and balance match it. Rent, insurance, HOA dues, tax and upkeep step up once a year. The sale value grows smoothly through the year. Break-even is the month after which buying stays ahead for the rest of 30 years.
| Year | Buy | Rent and invest | Buying ahead by |
|---|---|---|---|
| 1 | $70,857 | $101,684 | -$30,828 |
| 3 | $102,330 | $120,706 | -$18,376 |
| 5 | $136,332 | $139,102 | -$2,770 |
| 7 | $173,101 | $156,652 | $16,449 |
| 10 | $235,151 | $181,947 | $53,204 |
| 15 | $373,069 | $232,216 | $140,853 |
| 20 | $568,556 | $296,373 | $272,183 |
A made-up case: $2,400 rent rising 3% a year against a $400,000 home with 20% down at 6.5% over 30 years. Both start with $92,000. Property tax 1%, upkeep 1% and home value growth 3% a year; 3% to buy, 6% to sell; 5% return on investments.
What the first month looks like
In this example owning costs more each month than renting.
In the example, the first month of owning costs $2,814.29, of which $2,022.62 is principal and interest. Rent is $2,400.00. The renter invests the $414.29 difference. The buyer’s extra spending shows up later as principal paid and as a home that may be worth more. By year 5 the gap is $2,770 in renting's favor, and it reverses after that.
Which assumptions matter most
Change one at a time and watch the break-even point.
In this model, time in the home matters a great deal, because buying costs and selling costs are paid once and spread over the years you stay. Home value growth comes next. At 0% growth the buyer relies on principal paid and avoided rent. A higher investment return helps the renter, because the renter starts with the down payment invested. Rent growth, the interest rate and the price of the home also move the result.
Every starting figure on this page is a labeled assumption. The site does not fetch rents, home prices or rates. Use quotes you have. To price the costs of buying closely, use the closing cost calculator. To see how big a loan fits your income, use the affordability calculator.
What this comparison leaves out
Some things are real but depend on your situation.
Income tax is not modeled. That covers the mortgage interest deduction, tax on investment gains and any tax on the sale of a home. Moving costs, renter’s insurance, a change in income and the value you put on stability or flexibility are left out too. Property tax is treated as a share of the home’s value each year. If your county works differently, change the input.
Rent vs buy questions
- How is the break-even point worked out?
- The calculator tracks what each path would leave you with at the end of every month: the renter's investments, against the buyer's home value minus the loan and selling costs, plus anything the buyer invested. The break-even point is the month after which buying stays ahead for the rest of the span it checks, which is 30 years or your planned stay if that is longer. If buying never stays ahead in that span, it says so.
- Why does the renter invest the down payment?
- Because the money exists on both paths. A buyer puts it into the home, so a fair comparison lets the renter put the same cash to work. Both paths also spend the same amount each month: whichever costs less invests the difference. Set the investment return to 0 if you would not invest it.
- What does this comparison leave out?
- Income tax and capital gains tax, including the mortgage interest deduction and any home sale exclusion, are not modeled. Neither are moving costs, renter's insurance, a change in your income, or the value of staying put. Mortgage insurance is included, at a rate you can edit, until the loan falls to 80% of the price. Treat the result as a cost comparison, not a verdict.
- Is principal counted as a cost of buying?
- No. Principal builds equity, so it shows up in the buyer's wealth instead of the cost columns. Interest, property tax, insurance, HOA dues, upkeep and the cost of buying are counted as spent.
- Which assumptions change the answer the most?
- Usually how long you stay, how fast the home's value changes and what you assume the renter's investments earn. Rent growth and the interest rate matter too. Change one at a time and watch the break-even point move.
- Does this calculator use current market rates or prices?
- No. Every figure is one you type or a labeled starting assumption. The site does not fetch rates, rents or home values, so use quotes and local numbers of your own.