Rent vs. Buy Calculator
Compare the true cost of renting versus buying over time. Find your break-even point and make a confident, data-driven decision.
Renting
National average: 3-5% per year
Annual premium (~$15/month avg)
Typically 1-2 months rent
Buying
Current 30-year rate: 6.09%
Historical avg: 3-4% (varies by location)
Total Cost Comparison
All costs over 7 years
Cost Over Time
Cumulative net cost comparison
Wealth Building Comparison
Net worth impact after 7 years
How This Calculator Works
Our rent vs. buy calculator provides a comprehensive financial comparison by accounting for all major costs and benefits of each option.
Renting Costs
We calculate the total cost of renting including:
- Monthly rent with annual increases
- Renter's insurance premiums
- Opportunity cost of security deposit
We also credit you with investment returns on your would-be down payment.
Buying Costs
The true cost of homeownership includes:
- Mortgage principal and interest
- Property taxes and insurance
- PMI (if down payment < 20%)
- Maintenance (typically 1% of value/year)
- HOA fees (if applicable)
- Closing costs when buying and selling
Break-Even Analysis
The break-even point is when the total cost of buying equals the total cost of renting. Before this point, renting is cheaper; after, buying wins.
Key factors affecting break-even: home appreciation, rent inflation, mortgage rate, and how long you stay.
Wealth Building
Buying builds wealth through equity accumulation (mortgage principal payments) and home appreciation. Renting can build wealth if you invest the difference.
We compare the net worth impact of each option based on your inputs.
Opportunity Cost
If you rent, your down payment can be invested. We model the potential returns at your specified rate (default 7%, roughly the historical stock market average).
This is a key factor often overlooked in rent vs. buy comparisons.
What's Not Included
This calculator provides estimates. Factors not modeled:
- Tax benefits of mortgage interest deduction
- Lifestyle and flexibility preferences
- Local market conditions and trends
- Potential rental income (house hacking)