About the Rent vs. Buy Calculator
Renting is usually cheaper in the short term; buying tends to win over longer horizons as you build equity and the home appreciates. The break-even depends on your rent, home price, rate, how long you stay, and selling costs. This tool estimates the net cost of each path over the period you choose so you can see which comes out ahead — and by how much.
How it’s calculated
Net cost of buying = down payment + mortgage payments + property tax + insurance + maintenance − (home value at the end − remaining loan balance − a 6% cost to sell). Net cost of renting = the sum of your rent over the same years, grown by your expected annual increase. The lower net cost wins.
Example calculation
Renting at $2,000/month (rising 3%/year) versus buying a $400,000 home with 20% down at 6.5%: over a short stay renting often costs less, but past several years the equity and appreciation from owning usually tip the balance toward buying.
Frequently asked questions
When does buying beat renting?
Usually the longer you stay. Buying carries large upfront and selling costs, so short stays favor renting; over more years, equity and appreciation tend to make owning cheaper. The break-even varies with your inputs.
What costs does this include?
For buying: down payment, mortgage payments, property tax, insurance, maintenance, and a 6% selling cost, offset by your equity and the home's appreciation. For renting: total rent with your expected annual increase.
Does it account for tax benefits?
No. To keep it simple and general, it doesn't model mortgage-interest deductions or the return you might earn by investing your down payment. Treat it as the shape of the decision, not an exact figure.
This calculator provides estimates for educational purposes and should not be considered financial, tax, or legal advice. Your actual figures may vary with lender terms, fees, and market conditions.