Rent vs Buy Calculator
How many years until buying beats renting
Buying
Renting
Ownership costs & fees tuned for the US, change to match your market
Property tax and maintenance are percentages of the home's current value, so they rise as it appreciates. Closing and selling costs are percentages of the purchase and sale price.
Year-by-year comparison
| Period | Spent buying | Home equity | Net worth (buy) | Spent renting | Net worth (rent) | Ahead |
|---|
How to Use
- 1Enter the home you would buy and the rent you would otherwise pay.
- 2Set how long you realistically expect to stay put.
- 3Read the break-even year. Stay longer and buying wins.
- 4Open the cost panel and try pessimistic appreciation. The answer moves a lot.
How It Compares
- Buyer's net worthSale price − selling costs − loan + savings
- Renter's net worthThe invested down payment + savings
- Same budgetWhoever pays less invests the rest
- Break-evenFirst year buy ≥ rent
Quick Examples
Tap an example to load it above.
Everything about the Rent vs Buy Calculator
Why the answer is a number of years, not a yes or a no.
This rent vs buy calculator runs both options side by side, month by month, and reports the break-even year, the point at which a buyer's net worth overtakes a renter's. Stay longer than that and buying wins. Move sooner and renting wins, no matter how strongly you feel about owning.
The reason a break-even year exists at all is that buying front-loads its costs. A down payment, closing costs and the first years of a mortgage, which are almost entirely interest, all land before you own much of anything. Appreciation and principal repayment need time to overtake them.
The two things most calculators get wrong. First, they let the down payment disappear: if you rent, that money is invested, and ignoring its growth rigs the comparison in favour of buying. Second, they forget selling costs: agent fees and closing take roughly 6% off the sale price, which on a $500,000 home is $30,000, often more than the equity built in the first few years. This calculator does both, which is why its break-even year is usually later than the ones you will see elsewhere.
How the comparison is kept fair
Both sides are given the same monthly budget. In any month where buying costs more, the renter invests the difference at your expected return. In any month where renting costs more, which happens later on as rent escalates and the mortgage stays fixed, the buyer invests the difference instead. The renter also starts by investing the entire down payment and closing costs.
Because both sides spend exactly the same amount every month, cumulative spending cancels out and the comparison reduces to net worth:
| Side | Net worth is… |
|---|---|
| Buying | Sale price − selling costs − remaining mortgage + any side savings |
| Renting | The invested portfolio, and nothing else |
What moves the answer most
- 1Home appreciation, by a mile
It compounds on the full value of the house, not on your equity, so a 1% change swings the break-even year further than anything else on the page. Nobody knows the future rate, so run 1%, 3% and 5% and see how wide the range is before you trust a single number.
- 2The investment return
This is the renter's engine. Set it to 0% and buying almost always wins, which is exactly the hidden assumption in calculators that ignore it. A realistic long-run figure matters as much as the appreciation rate.
- 3The gap between rent and the true cost of owning
Compare the first-year monthly figures in the note under the result. Owning is rarely just the mortgage: tax, insurance and maintenance often add 40% on top.
- 4How long you actually stay
The only input you have real control over. If a job, a relationship or a city might move you within a few years, that uncertainty is worth more than any rate assumption here.
What this calculator does not include
No tax treatment. Mortgage interest and property tax deductions vary enormously by country, and in the US they only help if you itemise, which most households no longer do. If they apply to you, buying does better than shown here. There is also no capital-gains treatment on either the home or the investments.
It also assumes you stay put and sell once at the end, that you can invest spare cash rather than spending it, and that every rate holds steady. Real life delivers none of those. Treat the break-even year as a way to test assumptions, not as a forecast, and note that it is only the financial half of the decision. Stability, freedom to move, and control over where you live are real and are not on this page.
Which of our calculators to use
Use the mortgage calculator when you already know you are buying and just want the monthly payment on a given price and down payment. Use the loan calculator when you have the loan amount and want the amortisation schedule and the effect of overpaying. Use the investment calculator to project the renter's portfolio on its own, without a property in the picture. This page is the one that puts the two paths head to head.
Frequently Asked Questions
How many years do I need to stay for buying to be worth it?
That is exactly what the break-even year at the top of this page tells you, for your own numbers. Five to seven years is the figure most often quoted, but it swings widely: strong appreciation and cheap borrowing can pull it under three years, while flat prices and high rates can push it past fifteen. Enter your real figures rather than trusting a rule of thumb.
Why does this calculator say buying takes longer to pay off than others do?
Because it counts two costs most others leave out. The down payment and closing costs are invested on the renting side rather than vanishing, and selling costs of around 6% are deducted from the home before comparing net worth. Both are real money, and including them typically moves the break-even year several years later.
Is renting really throwing money away?
No more than mortgage interest is. In the first years of a loan most of your payment is interest, not principal, and that money is gone just as rent is. Property tax, insurance and maintenance are gone too. The honest comparison is not rent against the whole mortgage payment, but rent against the part of ownership that never comes back, which is what this page models.
What if house prices do not go up?
Set the appreciation rate to 0% and see. Buying can still win eventually, because paying down principal builds equity even when the value is flat, but the break-even year moves out sharply. Trying a pessimistic rate is the single most useful thing you can do on this page, since appreciation compounds on the full value of the house and moves the answer more than any other input.
Does it include mortgage interest tax deductions?
No. Tax treatment varies enormously between countries, and in the US it only helps if you itemise rather than take the standard deduction, which most households no longer do. If deductions genuinely apply to you, buying performs better than this calculator shows. This is a calculator, not tax or financial advice.
What investment return should I assume for the renter?
Use whatever you would genuinely earn on the money, after fees. A broad stock index has historically averaged around 7% a year over long periods with severe swings along the way; a cash savings account earns far less. Setting it to 0% quietly assumes the renter stuffs the down payment under a mattress, which is the hidden assumption in calculators that skip this input entirely.
Why does the calculator show costs I did not expect?
Owning is more than the mortgage. Property tax, home insurance, maintenance of roughly 1% of the value a year, and any HOA fee are all included, and property tax and maintenance rise as the home appreciates. Open the ownership costs panel to change any of them to match your market, because the defaults are typical US figures and will not fit everywhere.
Is the rent vs buy calculator free and is my data stored?
It is completely free with no sign-up, and every figure is calculated inside your browser, so nothing about your finances is sent to a server or stored anywhere. Remember that the result is only the financial half of the decision, and that stability and freedom to move are real factors this page cannot price.