Rent vs Buy Calculator

Compare the true cost of buying a home against renting over the years you plan to stay, including equity, appreciation and investment returns.

  • Reviewed October 2026
  • Formula and worked example below
  • Free, no sign-up, runs in your browser
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Enter your numbers to see the result.

Comparing apples to apples

Comparing a mortgage payment with rent is misleading. Owners also pay property tax, insurance, maintenance and transaction costs, but they build equity and benefit from rising home prices. Renters avoid those costs and can invest the money they would have put into a down payment. This calculator adds up everything each option costs over the years you plan to stay and subtracts what you walk away with.

  • Buying: down payment + 3% closing costs + mortgage payments + property tax + maintenance − (sale price − 6% selling costs − remaining loan).
  • Renting: total rent − investment gains on the cash you did not spend on a down payment and closing costs.

Example

For a $400,000 home with 20% down at 6.5%, compared with $2,200 rent, staying 7 years with 3.5% yearly growth in both prices and rents, the calculator shows how close the two options are. Change the number of years: buying typically wins the longer you stay, because transaction costs are spread over more years.

The break-even horizon

Because buying and selling cost roughly 9% of the price combined, buying rarely pays off in under three to five years. In expensive coastal cities with high price-to-rent ratios, the break-even point can be ten years or more.

Beyond the numbers

Owning brings stability and freedom to renovate; renting brings flexibility and no surprise repair bills. Job security, family plans and how much you value either matter as much as the result here.

Frequently asked questions

Is it cheaper to rent or buy?

It depends mainly on how long you stay, the price-to-rent ratio in your area and mortgage rates. Over long periods buying often wins; over short periods renting usually does.

What is the price-to-rent ratio?

Home price divided by a year of rent for a similar home. Below about 15 tends to favor buying; above about 20 tends to favor renting.

Does the calculator include tax benefits?

No. Since the higher standard deduction, most homeowners no longer itemize, so the mortgage interest deduction helps fewer buyers.

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Last reviewed Oct 20, 2026. Results are estimates; check important decisions with a qualified professional.