Rent vs. Buy Calculator
Compare the net cost of buying a home against renting and investing your down payment, year by year, to find the break-even point.
Calculator
Buying wins at your horizon
Year 8Over 10 years, buying costs about $202,870.65 net versus $224,821.53 to rent — buying pulls ahead around year 8, so a stay that long favors owning.
Net cost over time: buy vs. rent
Show data table
| Year | Buy | Rent + invest |
|---|---|---|
| 0 | $80,000.00 | $0.00 |
| 1 | $43,566.69 | $20,000.00 |
| 2 | $62,815.00 | $40,520.00 |
| 3 | $81,726.53 | $61,571.60 |
| 4 | $100,281.71 | $83,166.55 |
| 5 | $118,459.78 | $105,316.73 |
| 6 | $136,238.67 | $128,034.19 |
| 7 | $153,594.92 | $151,331.06 |
| 8 | $170,503.61 | $175,219.63 |
| 9 | $186,938.24 | $199,712.29 |
| 10 | $202,870.65 | $224,821.53 |
Heads up: this result swings hard on the assumptions you set — appreciation, investment return, rent growth, and costs. It's a scenario comparison to explore, not a prediction or financial advice.
A scenario model, not a forecast or advice. It assumes fixed annual rates for appreciation, rent growth, and investment return, ignores income-tax effects (e.g. mortgage-interest deductions), and counts only the down payment as invested — your real numbers will differ.
About this calculator
"Should I rent or buy?" rarely has a single answer — it depends on how long you stay. Buying carries large up-front and exit costs (a down payment, closing and selling fees) that only pay off if you own long enough for appreciation and equity to outweigh them. This calculator runs both paths side by side over the years you plan to stay, charges ownership its real running costs, credits renting with the investment growth on the down payment you didn't spend, and finds the break-even year where buying finally becomes the cheaper choice.
How to read your results
The headline is the break-even year: the first year in which the cumulative net cost of buying drops to or below the cost of renting. Stay longer than that and buying tends to win; leave sooner and renting usually does. The two stats show each path's net cost at your chosen horizon — for buying, that's everything you've paid in (down payment, mortgage, taxes, maintenance, insurance) minus the equity you'd recover by selling; for renting, it's total rent minus the gain from investing the down payment instead. The chart traces both lines over time, and the point where they cross is your break-even. If buying never crosses below renting within your horizon, the tool says renting wins — that simply means you'd need to stay longer for ownership to pay off.
Worked example
A $350,000 home with 20% down ($70,000), a 6.5% mortgage over 30 years, versus renting a comparable place for $1,800/month. Rent and the home both grow 3% a year, maintenance is 1% and property tax 1.1% of value, insurance is $1,500/year, selling costs are 6%, and the down payment could instead earn 5% a year invested. You plan to stay 12 years.
The mortgage payment is $1,769.79/month. Buying breaks even at year 7: by then the net cost of owning (about $135,700) finally dips below the cost of renting and investing ($137,000), where a year earlier owning was still pricier. Because you're staying 12 years, buying comes out ahead — roughly $206,200 net to buy versus $250,800 to rent. Had you planned to leave after only 4 or 5 years, renting would have been cheaper.
Frequently asked questions
Why might it say renting wins?
"Renting wins" means buying never becomes the cheaper option within the number of years you plan to stay — not that buying is a mistake. Owning front-loads big costs (the down payment, and 6% or so in selling fees on the way out), so it usually takes several years of appreciation and paid-down principal to break even. If your horizon is short, or if you assume modest home appreciation, high mortgage rates, or a strong investment return on the down payment, renting and investing the difference can stay ahead for the whole period. Extend the horizon and you'll often see buying pull ahead.
Why is the result so sensitive to the assumptions?
Because the comparison spans many years, small changes in the annual rates compound into large differences. Bumping home appreciation or the investment return by even one percentage point can move the break-even year by several years or flip the winner entirely. Rent growth, the mortgage rate, and selling costs matter too. Treat the inputs as a scenario you control: try a pessimistic and an optimistic case rather than trusting a single number, and remember the tool can't predict actual markets.
What does the calculator leave out?
Several real-world factors. It ignores income-tax effects (such as mortgage-interest or property-tax deductions, which favor buying in some places), assumes fixed annual rates with no market volatility, and only invests the down payment — it does not invest any month-to-month difference between rent and the all-in cost of owning. It also leaves out moving costs, HOA dues, and the non-financial value of stability or flexibility. Use it to understand the trade-offs and the rough break-even horizon, then confirm specifics with a qualified advisor before deciding.
How it's calculated
For each year the model tracks both paths cumulatively. Buying: the monthly payment is the standard amortization M = loanAmount·r / (1 − (1+r)^−n) where r is the monthly rate and n the number of payments (with a 0% rate it is simply loanAmount ÷ n). Net cost of buying = down payment + mortgage paid so far + cumulative property tax, maintenance, and insurance, minus the equity you'd recover on sale (the home's appreciated value less selling costs, minus the remaining mortgage balance). Property tax and maintenance scale with each year's home value; insurance is flat. Renting: net cost = total rent paid (growing each year) minus the opportunity gain from investing the down payment at your assumed return — the core "rent and invest the difference" framing. The break-even year is the first year buying's net cost is at or below renting's; if that never happens within your horizon, the result is "renting wins". The model assumes fixed annual rates, ignores income-tax effects such as mortgage-interest deductions, and treats only the down payment (not monthly cash-flow differences) as invested. It is a scenario tool, not a prediction or financial advice.
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