Rent vs. Buy Calculator

“Should I rent or buy?” is not a question about monthly payment — it is a question about total wealth over the time you will live there. Buying ties up cash (a down payment you could otherwise invest), adds transaction costs, and carries maintenance and taxes, but builds equity and can appreciate. Renting keeps your cash liquid and flexible, but every dollar of rent is gone for good. The right answer depends on how long you stay, how fast home prices and rents grow, and what your cash could earn elsewhere.

Enter your home price, financing, rent, and assumptions above. The calculator runs a year-by-year simulation that compares your net worth if you buy and eventually sell against your net worth if you rent and invest the difference, and tells you the break-even year where buying pulls ahead. Everything runs in your browser — your numbers are never uploaded.

Why “net worth,” not “monthly payment”

Comparing a mortgage payment to rent is misleading, because part of the mortgage payment (principal) is forced savings you get back at sale, and the down payment is capital you recover (plus or minus appreciation) when you sell. The honest comparison is total net worth at the end of the holding period: cash you walk away with as a buyer, versus the investment account you would have built as a renter.

This calculator models that directly. Each year it amortizes the loan (tracking interest, principal, and the remaining balance), grows the carrying costs, and grows the renter’s invested cash at your opportunity-cost rate. The “net advantage of buying” is the difference in final net worth — positive means buying left you richer, negative means renting did.

How the costs are counted

Only true, unrecoverable costs count against buying. Mortgage interest (not principal) is a cost; principal returns at sale. Property tax, insurance, HOA, maintenance, and transaction costs (closing when buying, agent fees when selling) are all costs. On the other side, the mortgage-interest and property-tax deductions reduce the buyer’s cost at their marginal tax rate (the SALT cap is ignored as a simplification — see the FAQ). The renter’s cost is simply rent.

buyer cost (yr i) = interest_i + tax + insurance + HOA + maintenance − tax savings
renter cost (yr i) = rent_i
buyer net worth at sale = home value − selling costs − mortgage payoff
renter net worth = (down payment + closing) grown at the investment rate ± yearly cost difference

The break-even year

The break-even year is the earliest year where, if you sold then, buying would have left you at least as rich as renting. Early on, buying usually loses to renting because of closing costs and the slow start to equity; over time, fixed mortgage payments (while rent rises) and appreciation flip it. If buying never catches up within your horizon, the calculator says so — and renting is the better financial choice for that situation, regardless of the lifestyle reasons to own.

A useful rule of thumb: the longer you stay, the more buying tends to win, because the one-time transaction costs are amortized over more years. Most break-even points in normal markets fall somewhere between 5 and 7 years, but the exact number is extremely sensitive to appreciation and rent growth — change those inputs to see how fast it moves.

The assumptions that swing the answer

Three inputs dominate. Home appreciation drives both the buyer’s equity and the property tax / maintenance growth — overestimating it is the most common way to convince yourself to buy. Rent growth drives the renter’s escalating cost. Investment return (the opportunity cost) sets how fast the renter’s cash grows when it is not locked in a house. Stress-test all three in both directions before deciding; the honest answer is often “it depends on these,” not a single number.

This calculator intentionally ignores some real-world factors: it does not model PMI, the SALT deduction cap, or the fact that owning a home is less liquid than a rented one. It is a financial tie-breaker, not the whole decision — for the carrying-cost math on a property you are considering, see the cash-on-cash and DSCR calculators.

Frequently asked questions

How does this rent vs. buy calculator work?

It runs a year-by-year simulation comparing your net worth if you buy (and eventually sell the home) against your net worth if you rent and invest the cash you would have tied up in the house. It amortizes the mortgage each year, grows the buyer’s carrying costs and the renter’s rent, grows the renter’s invested cash at your opportunity-cost rate, and reports the difference in final net worth plus the break-even year.

What is the break-even year for buying?

It is the earliest year at which buying leaves you at least as wealthy as renting. In typical markets it often lands around 5–7 years, but it is very sensitive to home appreciation, rent growth, and the investment return you assume. Use the calculator to test your own numbers — small changes in those three inputs move the break-even point a lot.

Does the calculator include tax savings from the mortgage?

Yes, partially. It reduces the buyer’s cost each year by (mortgage interest + property tax) × your marginal tax rate. It ignores the SALT deduction cap ($10k) and does not model PMI, which is a simplification. If you do not itemize, set the marginal tax rate to 0%.

Why does principal not count as a cost of buying?

Because principal is forced savings, not a cost. Each principal payment reduces the loan balance, which means a smaller payoff (more cash to you) when you sell. Counting it as a cost would double-count it — once as a payment and again as a lost payoff. Only mortgage interest is a true, unrecoverable cost.

Does this calculator upload my data?

No. All calculations run locally in your browser. The inputs never leave your device — confirm it in your browser’s network tab while editing the fields.