How the rent vs buy comparison works
This calculator compares the net financial outcome of buying versus renting over a chosen number of years — not just monthly payments.
What "net cost of buying" means
Total mortgage payments + property tax + maintenance − the home equity you've built. This is what buying actually costs you financially: the equity you accumulate counts as a benefit that offsets the outgoings.
What "net cost of renting" means
Total rent paid − the investment gains on the down payment. If you rent instead of buy, you keep the down payment and invest it. Those returns (set in Advanced options, default 7%) reduce the true cost of renting.
The break-even year
Before the break-even, renting + investing the down payment often leaves you with more net wealth. After it, buying typically wins because equity accumulation outpaces rent savings and investment returns. Most US markets break even around year 5–8 at current rates.
For help understanding mortgage payments and amortization, see the mortgage payoff calculator. For down payment savings guidance, see the guide on how much to save for a down payment. To see how your savings could grow instead, try the compound interest calculator.
Frequently asked questions
- Is it better to rent or buy a home?
- Buying typically wins after 5–7 years in most US markets, but renting can be better short-term or where the price-to-rent ratio is very high.
- What is the break-even point?
- The year when buying's net cost drops below renting's. Before this point, renting and investing the down payment often beats buying.
- What costs are included?
- Buying: mortgage interest, property tax, maintenance, opportunity cost of down payment (offset by equity). Renting: total rent minus investment growth of the down payment.
- Is this calculator free?
- Yes — free, no sign-up, runs entirely in your browser.