Rent vs Buy Calculator
Compare the true long-term cost of renting versus buying — including equity, opportunity cost, and taxes. Not just a monthly payment comparison.
Monthly costs today
Breakeven point
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After 10 years
How to use this calculator
Enter the home price, your expected down payment, and current interest rate. Then add your current rent and how long you plan to stay. The calculator runs a full year-by-year simulation comparing your net worth in both scenarios — accounting for equity buildup, investment returns on the down payment, and rising rents.
What does "net worth" mean in this comparison?
Buyer net worth is your home's projected value minus the remaining mortgage and estimated 6% selling costs. Renter net worth is what happens if you invest the down payment (plus any monthly savings from cheaper rent) in the stock market. This makes the comparison apples-to-apples.
What is the breakeven point?
The breakeven point is when the buyer's net worth overtakes the renter's. Before that point, the renter is ahead because their invested down payment is growing. After it, the buyer is ahead because home equity has compounded. How long you plan to stay is the key variable — if you move before the breakeven, renting was the better financial choice.
Frequently asked questions
No. Buying builds equity but ties up a large down payment, carries higher monthly costs (taxes, insurance, maintenance), and has high transaction costs when selling. If you move within 3–5 years, renting is often the better financial choice. The breakeven point depends on your local market, mortgage rate, and what you'd earn investing the down payment instead.
When you put $80,000 into a down payment, that money is no longer available to invest in the stock market. At a 7% annual return, $80,000 grows to roughly $157,000 in 10 years. This "opportunity cost" is what renters can earn instead — and it's the main reason renting sometimes wins financially, especially in the short term.
Buying costs include: mortgage payment, property tax, homeowner's insurance (estimated at 0.5% of home value), HOA, and maintenance (estimated at 1% annually). The calculator also factors in ~3% closing costs at purchase and 6% selling costs at the end of the period. Renting costs include just your rent, rising at the rate you specify.
For most buyers today, the tax deduction has less impact than it used to. Since the 2017 Tax Cuts and Jobs Act roughly doubled the standard deduction, only about 10% of taxpayers now itemize. If you do itemize, the deduction can be significant in the early years when interest payments are highest — but this calculator uses pre-tax figures. Consult a tax advisor for your specific situation.