A rent vs buy calculator estimates selected costs of renting and homeownership over a time horizon you choose. Enter assumptions such as home price, down payment, mortgage rate and term, monthly rent, expected rent increases, and annual housing costs to see a side-by-side estimate.
This tool provides a simplified estimate, not a personalized recommendation or a complete comparison of household wealth. Its modeled comparison credits estimated down-payment investment growth to the renter, assumes a refundable security deposit is returned in full, and deducts estimated selling costs from projected home equity. These assumptions are not forecasts; review the limitations before using the result.
What the calculator compares
On the buying side, the estimate uses the down payment, modeled mortgage payments, closing costs, property tax, homeowners insurance, maintenance, and estimated home equity at the end of the selected period. Home equity is estimated from projected home value less the remaining mortgage balance.
On the renting side, it uses monthly rent with annual increases, renters insurance, and estimated investment growth on the down payment. A fully refundable security deposit is shown as an assumption but is excluded from net cost. The calculator compares estimated costs at the chosen horizon. It does not print a break-even year, but you can read one from it by running two horizons, as shown below.
How to enter your assumptions
- Buying: Enter the home price, down-payment percentage, mortgage rate and term, and estimates for closing costs, property tax, homeowners insurance, maintenance, annual appreciation, and selling costs as a percentage of projected home value. The appreciation field accepts −10% to 20% a year, so falling prices can be modeled.
- Renting: Enter the monthly rent, expected annual rent increase, annual renters insurance, and the one-time security deposit.
- Time horizon: Choose how many years to compare. The calculation rounds the horizon to the nearest month and applies annual rent increases at each 12-month interval.
- Investment return: The estimated growth on the down payment is subtracted from renter net cost. This assumes a constant return and does not account for taxes, fees, market volatility, or investment of monthly savings.
Understand the results
The monthly mortgage figure is a modeled principal-and-interest payment. Other displayed totals include rent paid, ownership expenses, remaining mortgage, projected home equity, estimated selling costs, estimated down-payment investment growth, and net costs. “Lower modeled net cost” describes only the entered assumptions; it is not a recommendation.
A lower estimated cost for one side does not establish that it is the better choice for you. The result changes when you change the assumptions, and the model omits important costs and financial effects. It is a scenario comparison at the selected horizon, not a forecast, investment analysis, or exact break-even calculation.
Finding the break-even year from the tool
The break-even year is the horizon at which cumulative buying cost falls below cumulative renting cost. Because the calculator compares one horizon at a time, run the same assumptions twice with different horizons and watch which side wins. The table below holds one scenario fixed and varies only the horizon.
Scenario: $400,000 home, 10% down, 6.50% fixed rate over 30 years, $4,800 annual property tax, $1,800 annual insurance, 1% maintenance, 3% annual appreciation, 3% closing costs, 6% selling costs, and 5% assumed return on the down payment. Rent is $2,200 a month, rising 3% a year, with $250 annual renters insurance and a $2,200 refundable deposit.
| Horizon | Buyer net cost | Renter net cost | Difference (positive means buying is cheaper) |
|---|---|---|---|
| 1 year | $58,602 | $24,650 | -$33,952 |
| 2 years | $80,595 | $49,992 | -$30,603 |
| 3 years | $101,953 | $76,045 | -$25,908 |
| 4 years | $122,644 | $102,828 | -$19,817 |
| 5 years | $142,639 | $130,360 | -$12,279 |
| 6 years | $161,904 | $158,662 | -$3,241 |
| 7 years | $180,403 | $187,755 | $7,352 |
| 8 years | $198,101 | $217,659 | $19,558 |
| 9 years | $214,958 | $248,397 | $33,439 |
| 10 years | $230,935 | $279,991 | $49,056 |
In this scenario the crossover falls between year 6 and year 7. Up to six years, the renter is ahead by a shrinking margin. From year 7, the buyer is ahead and the gap widens. That crossover is the number most people mean when they ask whether renting or buying is cheaper, and it is highly sensitive to selling costs, appreciation, and how long you actually stay. For a current market rate rather than the 6.50% used here, check Freddie Mac's Primary Mortgage Market Survey.
The year-7 row decomposes into the costs the tool actually charges. On the buying side: $40,000 down payment + $12,000 closing costs + $191,138 of mortgage payments over 84 months + $33,600 property tax + $12,600 homeowners insurance + $28,000 maintenance = $317,338 out of pocket. Add $29,517 of estimated selling costs and subtract $166,452 of projected home equity, and the net lands at $180,403 — the row in the table. On the renting side, the same horizon is $202,289 of rent + $1,750 of renters insurance − a $16,284 credit for growth on the down payment, which is what the 5% return assumption does to $40,000 over seven years. Every row in the table is built the same way; changing one input changes the credit, the equity, and the verdict together.
Important limitations
- Investment growth is hypothetical: The entered annual return is applied to the down payment and its estimated growth reduces renter net cost. Actual returns can differ; taxes, fees, volatility, and investment of monthly savings are excluded.
- Deposit treatment assumes a full refund: A fully refundable deposit is excluded from net cost. The model does not estimate deductions, a partial refund, or interest lost while the deposit is held.
- Not every cost or asset is modeled: Estimated selling costs are deducted from projected home equity, but other transaction, moving, financing, tax, or housing costs may be omitted. The renter's potential investment of monthly savings is not included.
- Some annual costs are simplified: Property tax and insurance are held flat, and maintenance is based on the original home price rather than changing home value.
- Horizon is rounded to months: Entered years are rounded to the nearest month for the calculations. This is an estimate, not day-specific billing or a precise move-out cost.
Because the model simplifies expenses, investment returns, and cash flows, use the comparison as a scenario estimate rather than a definitive financial conclusion. Check the assumptions and include relevant costs and assets that are not represented here.
For the owning side of this comparison, the Mortgage Calculator estimates the monthly principal, interest, tax, insurance, PMI, and HOA amounts behind the ownership cost you enter, the Closing Cost Calculator prices the purchase-day costs this tool reduces to a single percentage, and the Home Affordability Calculator frames the price range before either number exists.
Last verified: October 2026. Calculator figures are outputs for the inputs entered; they are not live quotes, current rates, or an offer.