Should you rent or buy a home?
Buying isn't automatically "throwing money away" on rent — and renting isn't automatically the smart move either. This calculator compares the full cost of both over the years you plan to stay: mortgage interest, property tax, maintenance, and closing costs against home appreciation and the opportunity cost of tying up your down payment. You get a verdict and the breakeven year. Everything runs in your browser — nothing is uploaded.
A simplified comparison, not financial advice. It assumes a fixed 30-year mortgage, a 3% closing cost when you buy and a 6% selling cost when you leave, and that money not spent on a down payment is invested at your chosen return. It does not model the mortgage interest deduction, PMI on low down payments, rent-vs-own tax differences, or moving costs. Treat the verdict as a starting point for your own decision.
Is it cheaper to rent or buy?
The honest answer is "it depends on how long you stay." Buying a home has large up-front costs — the down payment, closing costs, and the transaction fees you pay again when you sell. Those costs are spread over however many years you own the place. Stay long enough and appreciation plus the equity you build outweigh them; sell too soon and renting would have been cheaper. The crossover point is your breakeven year.
What "opportunity cost" means here
A down payment isn't free money — it's cash that could have stayed invested. If you put $90,000 down instead of investing it at 6%, you give up the growth that money would have earned. A fair rent vs. buy comparison credits the renter with that investment growth, which is why a big down payment and a strong stock market both tilt the math toward renting. This calculator charges the buyer the opportunity cost of every dollar tied up in the home.
The costs on each side
- Buying: mortgage interest (the part of the payment that isn't building equity), property tax, maintenance and insurance, closing costs to buy, and selling costs when you leave — offset by appreciation and the principal you pay down.
- Renting: the rent itself, rising each year — offset by keeping your down payment invested and skipping every ownership cost above.
When renting usually wins
- You expect to move within a few years, so transaction costs dominate.
- Prices are high relative to rents (a high price-to-rent ratio).
- You can earn a strong return investing the down payment elsewhere.
- You value flexibility and don't want to be responsible for repairs.
When buying usually wins
- You'll stay well past the breakeven year — often 5 to 7+ years.
- Rent in your area is high relative to purchase prices.
- You can lock a low fixed mortgage rate while rents keep climbing.
- You want a stable housing cost and a forced-savings effect.
Frequently asked questions
How does this calculator decide rent vs. buy?
It projects the total net cost of each path over the number of years you plan to stay. For buying it adds mortgage payments, property tax, maintenance, and closing costs, then subtracts the equity you'd walk away with after selling. For renting it totals the rent you'd pay. It also charges buying the opportunity cost of the cash you tied up. Whichever path costs less over your horizon is the verdict.
What is the breakeven year?
It's the first year at which owning becomes cheaper than renting on a cumulative basis. Before that year, the up-front costs of buying haven't been recovered and renting is ahead; after it, buying pulls ahead. If you're likely to sell before your breakeven year, renting is usually the better financial choice.
Does buying build wealth even if renting is "cheaper"?
Owning forces you to save through your mortgage principal, which many people find easier than voluntarily investing the difference. This tool assumes a disciplined renter who invests the down payment. If you wouldn't actually invest that money, buying's forced-savings effect can make it the better real-world choice even when the pure math is close.
Why isn't the mortgage tax deduction included?
Most households now take the standard deduction, so the mortgage interest deduction provides no benefit unless your itemized deductions exceed it. Leaving it out keeps the comparison honest for the typical buyer; if you itemize, buying looks slightly better than shown here.
See housing inside your whole financial plan
Free, private, and running entirely in your browser. Model your mortgage, savings, retirement accounts, and taxes together — and track plan vs. actual — no account required.