Rent vs Buy Calculator
Make the smartest financial decision for your situation. Compare the true costs of renting vs buying over 5, 10, or 30 years.
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Rent vs Buy Calculator
Make the smartest financial decision for your situation
🏢 Renting Scenario
🏠 Buying Scenario
🏠 BUYING IS BETTER!
You save $11,742.903
over 10 years
📊 Cost Comparison Over Time
💰 Total Rent Cost
$277,133.103
over 10 years
🏠 Total Buy Cost
$265,390.201
over 10 years
📈 Home Equity Built
$209,639.877
if you buy
📋 Detailed Breakdown (Buying)
🎯 Ready to Take the Next Step?
Now that you know whether buying makes sense, get matched with the best mortgage lenders for your situation. Compare rates, get pre-approved, and save thousands on your home loan!
How to Use the Rent vs Buy Calculator
Understanding the Inputs
🏢 Renting Scenario
- Monthly Rent: Your current or expected monthly rent payment
- Annual Rent Increase: Expected yearly rent increase (typically 3-5%)
- Renter's Insurance: Annual cost to insure your belongings
🏠 Buying Scenario
- Home Price: Purchase price of the home
- Down Payment: Percentage you'll pay upfront (typically 3-20%)
- Interest Rate: Mortgage interest rate (check current rates)
- Property Tax: Annual property taxes
- Home Appreciation: Expected annual home value increase
When Does Buying Make Sense?
✅ Buying is Usually Better If:
- •You plan to stay in the area for 5+ years (to reach break-even point)
- •You have a stable income and emergency fund (6 months expenses)
- •You can afford 20% down payment (to avoid PMI)
- •Home prices are appreciating in your area (3-5% annually)
- •Your DTI ratio is below 43% (debt-to-income)
⚠️ Renting Might Be Better If:
- •You plan to move within 3-5 years (won't reach break-even)
- •You have unstable income or job uncertainty
- •You can't afford down payment + closing costs (typically 5-8% of home price)
- •Home prices are stagnant or declining in your area
- •You want flexibility to relocate for career opportunities
What This Calculator Includes
💰 Costs Included
- ✓ Down payment
- ✓ Closing costs (typically 3-5%)
- ✓ Monthly mortgage payment (P&I)
- ✓ Property taxes
- ✓ Home insurance
- ✓ HOA fees (if applicable)
- ✓ Maintenance costs (1% of home value)
- ✓ Opportunity cost of down payment
📈 Benefits Included
- ✓ Home appreciation (equity gain)
- ✓ Principal paydown (equity gain)
- ✓ Mortgage interest tax deduction
- ✓ Property tax deduction (SALT cap)
- ✓ Break-even point analysis
- ✓ 5, 10, and 30-year projections
Frequently Asked Questions
How accurate is this rent vs buy calculator?
This calculator uses industry-standard formulas and includes all major costs (down payment, closing costs, taxes, insurance, maintenance) and benefits (appreciation, tax deductions, equity). However, actual results may vary based on your specific situation, local market conditions, and tax circumstances. Always consult with a financial advisor for personalized advice.
What is the break-even point?
The break-even point is when the total cost of buying equals the total cost of renting. After this point, buying becomes more financially advantageous. Typically, the break-even point is 3-7 years, depending on home prices, rent costs, and appreciation rates in your area.
Should I include opportunity cost?
Yes! Opportunity cost is the return you could earn by investing your down payment instead of using it to buy a home. If you could earn 7% annually in the stock market, that's the opportunity cost of tying up that money in a down payment. Our calculator includes this automatically.
What about mortgage interest tax deduction?
The calculator includes mortgage interest tax deduction, capped at $750,000 of mortgage debt (per TCJA 2017). However, with the higher standard deduction ($13,850 single, $27,700 married in 2023), many homeowners don't benefit from itemizing. The calculator accounts for this.
How much should I expect home prices to appreciate?
Historically, US home prices have appreciated 3-5% annually on average. However, this varies significantly by location and time period. Check local market data for your area. Conservative estimates use 3%, moderate 4%, and optimistic 5-6% appreciation.
What if I'm not sure how long I'll stay?
If you're uncertain about your timeline, renting might be safer. Buying typically makes sense if you plan to stay 5+ years. Use our calculator to see the break-even point for your specific situation. If you might move before that point, renting could save you money.