Rent vs Buy Calculator

Compare the true cost of renting vs buying a home. See break-even points, equity building, and make an informed housing decision.

10-Year Analysis

Recommendation

Similar

9 year break-even

Buying Saves

$6,370

over 10 years

Total Rent Cost$275,133
Total Buy Cost$374,358
Equity Built$262,967
Net Buy Cost$191,391

Buying Scenario

$
100,0001,000,000
%
%
%
$
%
%

Renting Scenario

$
5005,000
%
%

If renting, down payment ($80,000) would be invested at 7% return.

Comparison Period

120

Options Are Comparable

After 10 years, both options have similar costs. Your decision should be based on lifestyle preferences and flexibility needs.

Price-to-Rent Ratio: 16.7 (<15 favors buying, >20 favors renting)

Net Cost Over Time

Net cost accounts for equity built (buying) and investment growth (renting).

10-Year Analysis

Recommendation

Similar

9 year break-even

Buying Saves

$6,370

over 10 years

Total Rent Cost$275,133
Total Buy Cost$374,358
Equity Built$262,967
Net Buy Cost$191,391

Quick Answer

Rent vs buy depends on how long you'll stay, home prices, rent levels, investment returns, and tax situation. Generally, buying makes sense if staying 5+ years. Our calculator compares total costs including opportunity cost of down payment.

Key Facts

  • Buying usually better if staying 5+ years
  • Consider opportunity cost of down payment
  • Tax benefits from mortgage interest (if itemizing)
  • Homeownership has hidden costs (maintenance, taxes)
  • Rent increases vs fixed mortgage
  • Home appreciation varies significantly by market

Frequently Asked Questions

Depends on: how long you'll stay (5+ years favors buying), local market (price-to-rent ratio), opportunity cost of down payment, and lifestyle flexibility needs. Buying builds equity but has high transaction costs. Renting offers flexibility and predictable costs.
The break-even point is when total cost of buying (including opportunity cost of down payment) equals total rent paid. Typically 3-7 years in most markets. Factors: closing costs, selling costs (~10% total), appreciation rate, and rent inflation.
Home appreciation (historically 3-4% nationally) builds equity, making buying more attractive over time. But appreciation varies widely by location and can be negative. Don't count on appreciation to make a purchase worthwhile - buy for housing value, not investment.
Often overlooked: closing costs (2-5%), maintenance (1-2% of home value/year), HOA fees, higher insurance, property taxes (reassessed at purchase), opportunity cost of down payment, and selling costs (6-10% when you move).
Divide home price by annual rent. <15: buying favors. 15-20: comparable. >20: renting may be better. Example: $400k home / $24k rent = 16.7 (comparable). This is a quick check - full analysis should include appreciation, taxes, and opportunity costs.