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- Compares your net worth after a set number of years if you buy a home versus rent a similar one and invest the difference.
- Counts mortgage interest, property tax, insurance, maintenance, HOA, closing costs and selling costs, not just the monthly payment.
- Shows the break-even year: how long you need to stay before buying beats renting.
- Lets you change home price growth, rent increases and investment returns to test different futures.
How to use the rent vs buy calculator
Enter the home and the loan
Type the price of the home you would buy, your down payment as a percent, the mortgage rate and the loan term.
Enter the rent
Use the monthly rent for a similar home in the same area, so you compare like with like.
Say how long you will stay
This matters most. Buying has big one-time costs, and they need years to pay off.
Adjust the assumptions
Open the advanced section to set property tax, insurance, maintenance, HOA, closing and selling costs, and the growth rates for home prices, rent and investments.
How the rent vs buy comparison works
The calculator does not just compare a mortgage payment with a rent check. It follows both paths month by month and asks one question at the end: who has more money?
Buyer net worth
Net worth = home value × (1 − selling costs) − loan balance + investments
Monthly cost = principal and interest + property tax + insurance + maintenance + HOA
Property tax and maintenance grow with the home value. Insurance and HOA grow by the rate you set.
Renter net worth
Start = down payment + buying closing costs, invested
Each month: investments grow, and the renter adds (owning cost − rent) whenever owning costs more
If renting ever costs more than owning, the buyer invests that difference instead. This keeps the comparison fair: both people spend the same amount every month.
The break-even year is the first year in which the buyer’s net worth catches up with the renter’s. If you will move before that year, renting is usually the better money choice.
Rent vs buy examples
Example 1: a $400,000 home or $2,200 rent
A buyer puts 20% down on a $400,000 home with a 30-year loan at 6.5%. The same home rents for $2,200. Default assumptions: 3% home growth, 3% rent increases, 5% investment return, 1.1% property tax, $1,800 insurance, 1% maintenance, 3% closing and 6% selling costs.
After 10 years buying is ahead by $8,685, and after 30 years by $436,588. Time in the home is what makes buying work.
Example 2: the same home with different rent
Keep everything from example 1 but change the rent and look at year 7.
The price-to-rent ratio of your area is one of the strongest drivers of the answer.
How growth assumptions change the answer
Home price growth and investment returns pull in opposite directions. With the example 1 home and a 7-year stay:
Example 3: home growth vs investment return
Same home and rent as example 1, 7-year stay.
Nobody knows future returns, so try a cautious case and a hopeful case before you decide.
Where a rent vs buy calculator helps
First-time buyers
See whether your savings are better used as a down payment or left invested while you rent.
Planning a move
If a job or family change may move you in a few years, check whether you would pass the break-even year.
Expensive cities
Where prices are high compared with rents, renting and investing often wins for longer than people expect.
Testing a price
Change the price you would pay and see how it moves the break-even point before you make an offer.
It does not include mortgage interest or property tax deductions, private mortgage insurance on small down payments, capital gains tax on investments, or the non-money reasons people buy, like stability and freedom to renovate. Use it with the mortgage calculator, the home affordability calculator and the down payment calculator for the full picture.
Rent vs buy calculator FAQ
Is it better to rent or buy a house?
It depends mostly on how long you will stay, how high prices are compared with rent in your area, and how fast homes and investments grow. Buying usually wins if you stay well past the break-even year; renting usually wins for short stays.
What is the break-even point in rent vs buy?
It is the number of years after which the buyer’s net worth catches up with the renter’s. Before that, the one-time costs of buying and selling outweigh the equity you have built.
Why does the calculator invest the renter's money?
Because the down payment and closing costs do not vanish if you rent. A fair comparison assumes that money stays invested, and that whoever pays less each month invests the difference.
Is rent just throwing money away?
Not exactly. Owners also pay costs they never get back: mortgage interest, property tax, insurance, maintenance and selling costs. The calculator compares those unrecoverable costs with rent.
What investment return should I use?
Use a return you think is realistic after fees for where the money would actually go. Many people test 4% to 7% for a diversified stock and bond mix, and a lower rate for savings accounts.
Does a bigger down payment make buying better?
A bigger down payment lowers interest, but it also means more money that is not invested. Run the calculator with different down payments to see which way it tips with your numbers.