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Rent vs Buy Calculator

Year-by-year break-even analysis. Mortgage, taxes, insurance, maintenance, equity, and appreciation on one side; escalating rent on the other. We'll tell you when (and if) buying actually wins.

Your numbers

Compare your two paths over the holding period. Results update as you type.

Recommendation
Close callBreak-even: Year 7
Net cost of buying
$256,321
Net cost of renting
$257,459
Net difference
-$1,138(buying cheaper)
Monthly mortgage (PI)
$2,528
Year-by-year cumulative cost
YearBuy (net)RentCheaper
1$123,668$33,600Rent
2$146,932$68,208Rent
3$169,769$103,854Rent
4$192,153$140,570Rent
5$214,058$178,387Rent
6$235,458$217,339Rent
7$256,321$257,459Buy
How this is calculated

M = P × (r(1+r)^n) ÷ ((1+r)^n − 1)

Each year we add mortgage payments, property tax (1.2% of value), insurance (~$1,500 scaling with value), and maintenance (1% of value) to the buy column. We subtract equity built from amortization plus accumulated appreciation. The rent column escalates monthly rent by your rent-inflation rate annually.

Break-even is the first year that net buy cost is at or below cumulative rent.

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FAQ

Common questions

When does buying typically beat renting?
Most U.S. markets cross the break-even point between years 5 and 7, assuming a normal rate of home appreciation and rent inflation. The longer you hold, the more buying wins, because the fixed mortgage payment doesn't escalate the way rent does.
Why is buying often more expensive in the first 5 years?
Closing costs, transfer tax, and the heavy interest portion of early mortgage payments all front-load the cost of ownership. Add property tax, insurance, and maintenance on top, and the first few years feel painful, until appreciation and amortization catch up.
Should I include opportunity cost on my down payment?
If you'd otherwise invest the down payment in equities or another asset, yes, you should subtract that expected return from the buying side. Many buy-vs-rent comparisons skip this and make ownership look better than it is. We keep the model conservative and explicit so you can layer that in yourself.
What if home prices go down?
Set the appreciation input to a negative number to model a downturn. In a 0% or negative-appreciation scenario, renting almost always wins for shorter holding periods because you keep the optionality and avoid sale-side transaction costs.
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Rent vs Buy Calculator, Noseberry Digitals