Rent vs Buy Calculator

The right choice depends on your financial situation, how long you plan to stay, and local market conditions. Buying builds equity and can be cheaper long-term, but comes with large upfront costs and ongoing maintenance. Renting offers flexibility with lower initial costs. Use this calculator to find the breakeven point — if you plan to stay longer than that, buying generally makes more financial sense.

Key factors include: how long you plan to stay (shorter stays favor renting), your down payment savings, local home prices vs. rent levels, your credit score and mortgage eligibility, job stability, and whether you value flexibility or stability. The total cost comparison should include mortgage payments, taxes, insurance, maintenance, and the opportunity cost of your down payment.

Not always. Renting can be cheaper in the short term due to lower upfront costs, but over many years buying typically becomes more cost-effective as you build equity and your mortgage payment stays fixed while rents rise. In high-cost cities, renting may remain cheaper even long-term. The breakeven point varies significantly by location and market conditions.

The breakeven point is the number of years after which the total cumulative cost of buying a home equals the total cost of renting. Before that point, renting is cheaper; after it, buying is the more cost-effective choice. The breakeven point typically ranges from 3 to 7 years depending on your local market, down payment, and other costs.

The true cost of buying includes your down payment, closing costs (2–5% of the purchase price), monthly mortgage payments, property taxes, homeowners insurance, HOA fees, maintenance (typically 1% of home value annually), and selling costs when you eventually move. You also give up the potential investment returns you could have earned on your down payment.

When you buy, you tie up a large down payment that could otherwise be invested. If the stock market returns 6–7% annually and home appreciation is lower, the opportunity cost can be significant. This calculator accounts for investment return on the down payment to give you a true apples-to-apples comparison.

Home appreciation helps offset the costs of buying, but it's not the only factor. Even with modest 2–3% annual appreciation, buying can be financially advantageous if you stay long enough for equity to build and fixed mortgage payments to become cheaper relative to rising rents. However, appreciation alone doesn't guarantee buying is the right choice.

Buyer closing costs typically run 2–5% of the purchase price and include lender origination fees, appraisal fees, title insurance, inspection fees, prepaid taxes and insurance, and other administrative costs. When selling, closing costs (including agent commissions) can run 5–6%. These upfront and exit costs are a major reason why buying only makes sense if you stay for several years.