Rent vs Buy Calculator
Wondering whether it's better to rent or buy? This rent vs buy calculator compares the true cost of buying a home against renting over the years you'll stay, then tells you which is cheaper and by how much. It counts the down payment, mortgage, taxes, and upkeep against the equity you'd build, weighs renting's freedom to invest the difference, and shows your break-even year, so you can decide with real numbers instead of a gut feeling.
Last updated July 9, 2026 Estimates only, not financial advice Reviewed by the Calcowa team
Assumptions (appreciation, taxes, returns)
Closing costs are set at 2% to buy and 6% to sell. Change the assumptions to match your market.
Enter a home price, rent, and years above 0.
Net cost means everything you pay minus what you get back: home equity when you sell, or investment growth on the money you don't tie up. These are estimates, not financial advice.
How the rent vs buy math works
Comparing renting vs buying a home fairly means looking past the monthly payment. A mortgage can cost more per month than rent yet still come out ahead, because part of every payment builds equity you get back when you sell. That's why this tool compares the net cost of each choice, not just the monthly bill.
On the buying side, it adds your down payment, closing costs, mortgage payments, property tax, and upkeep, then subtracts the equity you'd walk away with after selling costs. On the renting side, it adds your total rent as it rises each year, then subtracts the investment growth on the cash you didn't sink into a down payment. The side with the lower net cost is the cheaper choice for your time frame.
What is the break-even point?
The break-even point is the year buying becomes cheaper than renting. Early on, the big upfront costs of buying keep renting ahead. As the years pass, you build equity and your rent keeps climbing, so buying pulls into the lead. For a typical home that break-even year often lands between 3 and 7 years, which is why the "should I rent or buy" answer hinges so much on how long you'll stay. If you'll move before your break-even year, renting usually wins.
Buying: pros and cons
- + Builds equity you keep
- + Locks in your housing cost
- + Stability and freedom to change the home
- − Ties up a big down payment
- − Upkeep, taxes, and repairs are yours
- − Slow and costly to sell
Renting: pros and cons
- + Flexible, easy to move
- + No upkeep or repair bills
- + Frees up cash to invest
- − Builds no equity
- − Rent keeps rising
- − Less control and stability
Frequently asked questions
It depends on how long you'll stay, your local prices, and what else you'd do with the money. Buying usually wins the longer you stay, because you build equity and stop paying rent that keeps rising. Renting can win over short stays, in expensive markets, or when you'd invest the difference at a strong return. This rent vs buy calculator runs your own numbers so you don't have to guess.
You compare the true cost of each over the years you'll stay. For buying, add the down payment, closing costs, mortgage payments, property tax, and upkeep, then subtract the home equity you'd get back when you sell. For renting, add the total rent, then subtract the investment growth on the money you didn't tie up in a house. Whichever net cost is lower wins.
The break-even point is the year when buying becomes cheaper than renting. Before it, the upfront costs of buying, like the down payment and closing costs, make renting cheaper. After it, equity and rising rents tip the math toward buying. The calculator shows your break-even year, and it's often somewhere between 3 and 7 years.
If you expect to move within about 3 years, renting is often the safer money choice, because you may not stay long enough to earn back the buying costs. Selling a home has real costs too, around 6% of the price, which can wipe out early equity. Use the break-even year here as your guide.
Buying builds equity, locks in your housing cost, and offers stability, but it ties up cash, adds upkeep, and is hard to reverse quickly. Renting is flexible, low-maintenance, and frees up money to invest, but the rent keeps rising and you build no equity. The right call balances the math with how settled you want to be.
Not always, but it often does once you pass the break-even year, because you stop paying ever-rising rent and keep the equity. The exceptions are pricey markets where buying costs far outrun rent, or when you'd earn a high return investing the down payment instead. Running your real numbers is the only way to know.
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