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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.

Recommendation

Close call

Break-even: Year 7

Home purchase price
USD
Down payment
%
Mortgage interest rate
%
Loan term
years
Monthly rent if you keep renting
USD / month
Annual home appreciation
%

Use a negative number to stress-test a downturn.

Annual rent inflation
%
Years holding the home
years
Net cost of buying
$256,321
Net cost of renting
$257,459
Net difference
-$1,138
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%), insurance, and maintenance (1%) to the buy column, then subtract equity and appreciation. The rent column escalates by your rent-inflation rate annually.

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We'll layer in opportunity cost, tax treatment, and submarket data to give you a recommendation tailored to your situation. Free 30-minute consult.

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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.
Need help interpreting your numbers?

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Calculators give you the formula. We help you turn it into a strategy that ships. Free 30-minute consult, no pitch deck, no commitment.