Rent vs Buy Calculator
Compare renting vs buying a home over time. Instantly see monthly costs, net position, break-even year, and which option saves more money.
How It Works
Compare total housing costs of renting versus buying over your chosen time horizon. Buying includes mortgage, taxes, insurance, maintenance, and equity built; renting includes rent increases and invested down-payment opportunity cost.
Formula
Net Buy Cost = (Total Mortgage + Taxes + Insurance + Maintenance) - Equity Gained
Net Rent Cost = Total Rent Paid - Investment Returns on Down Payment
The break-even point occurs in the year where Net Buy Cost becomes less than or equal to Net Rent Cost.
Worked Example
Buying a $400k Home vs Renting at $2,000/mo
- Buying: $400,000 home with 20% down ($80,000).
- Mortgage, taxes, maintenance: ~$3,000/mo.
- Renting: $2,000/mo, investing the $80,000 down payment at 7% return.
- Year 1-5: Renting is cheaper because most mortgage payments go toward interest.
- Year 6: Equity growth and rent increases make the Net Buy Cost lower than Net Rent Cost. This is the break-even year.
Common Mistakes
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Ignoring maintenance and property taxes
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Always factor in 1-2% of the home's value per year for maintenance, plus property taxes.
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Assuming rent is throwing money away
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Renting is the maximum you will pay; a mortgage is the minimum you will pay. Renting allows you to invest your down payment elsewhere.
Frequently Asked Questions
Related Guide & Instructions
2026-07-10
Renting vs Buying a Home: How to Make the Financially Optimal Choice
Is renting really throwing money away? Discover the hidden costs of homeownership, the 5% Rule, and how to mathematically decide whether to rent or buy.
Read full guide →Related Calculators
DisclaimerThe results provided by this calculator are estimates and for informational purposes only. They do not constitute financial, legal, or professional advice. Please consult with a qualified professional for your specific needs.