Rent vs. Buy Calculator
Compare buying a home with renting and investing the money you'd otherwise put into it. See which choice leaves you with more money after the years you plan to stay, and how long you'd need to stay for buying to pay off.
The calculator assumes the growth rates you enter stay the same every year, and it leaves out income taxes, inflation and moving costs. Results are estimates. For a decision this big, consider talking with a qualified financial professional. See our terms of use.
How to use this calculator
Start with the six main fields:
- Home price and monthly rent: compare like with like, such as a three-bedroom house you could buy and a similar one you could rent in the same area.
- Years you plan to stay: how long until you'd expect to sell and move. This is often the input that matters most.
- Down payment, mortgage rate and loan term: the loan you'd use to buy.
The results update as you type. The first box says which choice leaves you with more money, and the next one says by how much. The break-even year is the first year in which buying comes out ahead. The two columns show how each net worth adds up. Open Show net worth year by year to see the result for every length of stay up to 30 years.
Open More options to change property tax, insurance, maintenance, HOA dues, PMI, closing and selling costs, and the growth rates for home prices, rent and investments. The defaults are examples, not forecasts. Replace them with your own numbers where you can. Closing costs, for example, typically run 2% to 5% of the purchase price, according to the Consumer Financial Protection Bureau.
How the rent vs. buy calculation works
Comparing rent with a mortgage payment misses most of the story. Part of each mortgage payment pays down your loan, the home may rise in value, and buying ties up cash that a renter could invest. So the calculator compares what each choice leaves you with at the end of your stay: your net worth.
It works month by month. The buyer pays the down payment and closing costs upfront, then each month the principal and interest, property tax, insurance, maintenance, HOA dues and any PMI. The renter pays rent plus renters insurance and invests the cash the buyer spent upfront. Each month, whichever choice costs less invests the difference. At the end:
Buying net worth = home value − mortgage balance − selling costs + invested savings
Renting net worth = value of the renter's investments
Example: with the default inputs, the buyer puts $80,000 down and pays $12,000 in closing costs, so the renter starts by investing $92,000. In the first month, owning costs $2,872.62: $2,022.62 of principal and interest, $366.67 of property tax, $150.00 of insurance and $333.33 of maintenance. Renting costs $2,215.00, so the renter invests the $657.62 difference. After 7 years the home is worth $491,950. After paying off the $289,332 mortgage balance and $29,517 in selling costs, the buyer has $173,101. The renter's investments have grown to $192,853, so renting comes out ahead by $19,752. Buying first comes out ahead in year 11.
The calculator also assumes that:
- Home prices, rent and investments grow at the yearly rates you enter. Investments compound monthly, so a full year adds exactly the return you enter.
- Property tax and maintenance are a percentage of the home's value at the start of each year, so they rise as the home gains value. Insurance, HOA dues and renters insurance stay the same.
- PMI applies only with less than 20% down. It ends when the loan balance is scheduled to reach 78% of the price, or halfway through the loan term if that comes first, as federal law requires for most conventional loans. Our guide on how to get rid of PMI explains the rules.
- All amounts are in future dollars, not adjusted for inflation.
- Income taxes are left out. Most tax filers take the standard deduction, so mortgage interest and property tax often don't lower their taxes. The FAQ below explains when taxes matter.
Unrecoverable costs: the money you don't get back
Rent is often called "throwing money away," but owners also pay costs they never get back. Here they are over 7 years in our example:
| Cost over 7 years | Buying | Renting |
|---|---|---|
| Mortgage interest | $139,232 | — |
| Property tax | $33,715 | — |
| Insurance | $12,600 | $1,260 |
| Maintenance | $30,650 | — |
| Closing and selling costs | $41,517 | — |
| Rent | — | $202,289 |
| Total | $257,714 | $203,549 |
The buyer's unrecoverable costs are $54,165 higher. The $30,668 of principal paid isn't on the list, because it stays yours as home equity. Rising prices more than cover that gap, because the home gains $91,950 in value. But the renter's investments earn $57,537 over the same years. Add it up (−$54,165 + $91,950 − $57,537) and you get the $19,752 by which renting comes out ahead.
The price-to-rent ratio
For a quick first check, divide the home price by a year of rent for a similar home. In our example, $400,000 ÷ ($2,200 × 12) gives a ratio of 15.2. The higher the ratio, the more expensive buying is compared with renting. Here's how the rent changes the result for the same $400,000 home, with everything else at the defaults:
| Monthly rent | Price-to-rent ratio | Better after 7 years | Break-even year |
|---|---|---|---|
| $1,500 | 22.2 | Renting by $98,490 | Not within 30 years |
| $2,000 | 16.7 | Renting by $42,249 | Year 25 |
| $2,200 | 15.2 | Renting by $19,752 | Year 11 |
| $2,500 | 13.3 | Buying by $13,993 | Year 6 |
| $3,000 | 11.1 | Buying by $70,234 | Year 3 |
The ratio ignores your mortgage rate, your costs and how long you'll stay. Use it to spot places where renting or buying is clearly cheaper, then run the full numbers above.
How long you stay matters most
Buying comes with large one-time costs that a renter never pays. If you moved after one year in our example, you'd pay $12,000 to buy and $24,720 to sell, and renting would come out ahead by $34,769. Each year you stay, you pay down more of the loan and gain more from rising prices, so the gap shrinks: $26,416 after 5 years and $5,829 after 10. Buying pulls ahead in year 11 and is ahead by $91,053 after 20 years.
Lower transaction costs shorten the wait. With selling costs of 3% instead of 6%, buying breaks even in year 9 instead of year 11. The growth rates matter just as much. Here's the 7-year result with one input changed at a time:
| Change from the example | Better after 7 years | Break-even year |
|---|---|---|
| None (the defaults) | Renting by $19,752 | Year 11 |
| Home prices grow 4% a year | Buying by $10,365 | Year 6 |
| Home prices grow 2% a year | Renting by $48,108 | Year 20 |
| Investments earn 4% a year | Buying by $1,538 | Year 7 |
| Investments earn 8% a year | Renting by $43,427 | Not within 30 years |
| Mortgage rate of 5.5% | Buying by $6,651 | Year 7 |
| Mortgage rate of 7.5% | Renting by $46,521 | Year 23 |
| Selling costs of 3% | Renting by $4,994 | Year 9 |
| 10% down, with PMI | Renting by $37,453 | Year 16 |
If you're not sure how long you'll stay, open the year-by-year table and ask whether you'd still be comfortable if you had to move a few years sooner than planned.
What the numbers can't tell you
Money isn't the only factor. Owning gives you stability and control: no landlord can raise your rent or decline to renew your lease, and you can renovate, paint or get a pet. Renting gives you the flexibility to move for a job or a relationship, and the landlord handles most repairs. Owning also ties much of your wealth to one house in one place, and big repairs can arrive at bad times, so keep an emergency fund either way. If you're leaning toward buying, our home affordability calculator shows a price range that fits your income, and the 15-year vs. 30-year mortgage guide helps you choose a loan.
Frequently asked questions
Is renting just throwing money away?
No. Rent pays for a place to live, just as an owner's interest, property tax, insurance and maintenance do. Only the principal part of a mortgage payment builds wealth directly. Compare each choice's unrecoverable costs, as in the table above, rather than rent with a full mortgage payment.
Why doesn't the calculator include income taxes?
Mortgage interest and property tax only lower your taxes if you itemize deductions, and most filers don't. IRS data show that fewer than 1 in 10 tax returns itemized in tax year 2023. Most of the rest took the standard deduction, which for 2026 is $32,200 for married couples filing jointly and $16,100 for single filers. In our example, the first year's mortgage interest and property tax add up to $25,095. That's less than the joint standard deduction, so a married couple with few other deductions would get no tax benefit from them. Other tax rules favor buying: you can generally exclude up to $250,000 of profit on the sale of your main home ($500,000 if married filing jointly) if you owned it and lived in it for at least 2 of the last 5 years, while a renter's investment gains may be taxed. If you itemize, ask a tax professional how it changes your numbers.
What investment return should I use?
Use a return you'd realistically expect, after fees, on how you'd actually invest the money. The 6% default is an example, not a forecast, and investments can lose value. Higher returns favor renting and lower returns favor buying. In our example, at 4% buying comes out ahead after 7 years, while at 8% buying doesn't catch up within 30 years.
What if I wouldn't actually invest the difference?
Then renting's advantage shrinks or disappears. The comparison assumes the renter invests the upfront cash and every dollar of monthly savings. A mortgage works like forced savings, because each payment builds equity whether or not you feel like saving. If you'd likely spend the difference, give the buying column more weight.
How much should I budget for maintenance?
Fannie Mae suggests budgeting 1% to 4% of a home's value each year for maintenance and repairs, with newer homes near the low end and homes over 30 years old toward the high end. It makes a big difference: in our example, raising maintenance from 1% to 2% means renting comes out ahead by $57,246 after 7 years, and buying doesn't catch up within 30 years.
Last reviewed: October 2026