The rent vs. buy decision is one of the biggest financial choices you'll make. Buying builds equity and offers stability, but it comes with mortgage interest, property taxes, insurance, and maintenance costs that add up fast. Renting keeps you flexible and lets you invest your down payment elsewhere. Enter your numbers below for a NYT-style analysis that shows you exactly when — and whether — buying becomes cheaper than renting.
Buying Costs
Renting Costs
Investment & Time
Wealth Position After 10 Years
Cumulative Cost Over Time
Lower bar = cheaper option that year. Costs include all expenses minus equity & investment gains.
Assumptions Used
How to Use the Rent vs. Buy Calculator
Deciding whether to rent or buy a home is one of the most significant financial decisions most people make. The right answer depends on far more than just comparing a monthly mortgage payment to monthly rent — it requires accounting for property taxes, maintenance, insurance, opportunity cost, appreciation, and how long you plan to stay. This rent vs. buy calculator performs a comprehensive, year-by-year analysis so you can see the true financial picture.
Step 1: Enter Your Buying Costs
Start with the home price you are considering and your expected down payment percentage. The down payment affects both your loan amount and your mortgage payment. Enter the current mortgage interest rate — you can find the latest rates from Freddie Mac's weekly survey or your lender — and choose your loan term (typically 30 years). Then enter your local property tax rate (find it on your county assessor's website), estimated homeowners insurance cost, expected annual maintenance (1% of home value is the standard rule of thumb), and any HOA fees if applicable.
Step 2: Enter Your Renting Costs
Enter your current or target monthly rent. The annual rent increase rate accounts for the fact that landlords raise rent over time — 3% per year is a common US average, though it varies by market. Also enter your renters insurance cost (typically $150–$250/year).
Step 3: Set Investment Return and Time Horizon
The investment return rate represents what you could earn if you invested your down payment in the stock market instead of using it for a home purchase. Historically, the S&P 500 has returned about 7% per year inflation-adjusted. This is the key "opportunity cost" of buying. Set your time horizon — how many years you plan to stay — to see the break-even analysis. The break-even year is where buying becomes cheaper than renting.
How the Calculations Work
The calculator models each year independently. For buying, it computes your fixed mortgage payment, annual property taxes (applied to the current home value), insurance, maintenance costs, and HOA fees. It tracks your mortgage amortization to measure equity built each year, and applies home appreciation to grow the home's value. The net buying cost subtracts equity and appreciation from gross costs. For renting, it compounds your monthly rent by the annual increase rate and subtracts the investment growth on the down payment. Closing costs (estimated at 3% of home price) are added as a one-time upfront buying cost in year 1.
Understanding the Results
The break-even year is where the cumulative net cost of buying dips below the cumulative net cost of renting. Before that year, you would have been better off financially by renting. After it, buying is the superior choice. The wealth comparison shows your net worth position at the end of your time horizon: if you bought, you have home equity minus remaining mortgage balance; if you rented, you have the compounded value of the invested down payment. The bar chart makes it easy to see how the two options compare at each year.
For a detailed walkthrough, see our guide: Rent vs. Buy Decision in 2026.
FAQ
Is renting or buying a home cheaper?
It depends entirely on your local market, how long you stay, and current mortgage rates. Buying typically becomes cheaper after a break-even point of 5–10 years when you account for equity built and appreciation. In high-cost cities or with low appreciation rates, renting can be cheaper indefinitely. This calculator shows you the exact crossover point for your specific numbers.
What costs does this rent vs buy calculator include?
For buying, the calculator includes mortgage principal and interest, property taxes, homeowners insurance, maintenance (default 1% of home value per year), HOA fees, and estimated closing costs (3% of home price). It subtracts equity built and home appreciation. For renting, it includes cumulative rent with annual increases, renters insurance, and the opportunity cost of investing your down payment at the stock market return rate.
What is the break-even point in a rent vs buy analysis?
The break-even point is the year at which the cumulative total cost of buying falls below the cumulative total cost of renting. Before this point, renting is financially advantageous. After it, buying becomes the cheaper option. A typical break-even is 5–8 years, but it varies significantly based on home prices, rent levels, mortgage rates, and local appreciation.
What is opportunity cost in a rent vs buy comparison?
Opportunity cost is what you give up by using money for a down payment instead of investing it. If you put $60,000 down on a house, you lose the investment returns that money could have earned in the stock market (historically around 7% per year inflation-adjusted). This calculator tracks that foregone investment growth as a financial advantage of renting, making the comparison fair and accurate.
Should I include HOA fees in my calculation?
Yes, HOA fees are a significant and often overlooked homeownership cost. They range from $0 in non-HOA communities to $500–$1,000+ per month in condos or gated communities. Always include them if applicable, as they substantially increase the true cost of buying and can delay or eliminate the break-even crossover with renting.
Is my data private when using this tool?
Yes, completely. All calculations run locally in your browser using JavaScript. No financial data, home prices, income, or personal information is ever sent to a server. You can verify this by opening your browser's developer tools and checking that no network requests are made when you click Calculate.
How accurate is the home appreciation rate I should use?
The US national average home appreciation has been around 3–4% per year over the long term, roughly matching inflation. However, appreciation varies dramatically by location — some cities have seen 6–8% annually, while others have been flat or negative. Use your local market data for the most accurate results. Conservative estimates (3%) give you a realistic floor-case scenario for buying.