Rent vs Buy Calculator
Compare the true cost of renting versus buying a home over time. Factor in equity, appreciation, opportunity costs, and more to find your break-even point.
Renting
Buying
Additional Assumptions
Investment return rate is used to calculate the opportunity cost of your down payment. Home appreciation is assumed at 3% annually.
10-Year Cost Comparison
Buying saves you $2,767 over 10 years.
The break-even point is at year 10. Since you plan to stay 10 years, which is longer than the break-even point, buying may be the better financial choice.
Cumulative Cost Over Time
Purple line = renting cost. Green line = buying net cost (after equity and appreciation). Yellow dashed line = break-even point.
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How the Rent vs Buy Calculator Works
This calculator compares the total cost of renting against the net cost of buying a home over your chosen timeframe. It accounts for factors that many simple calculators miss, including equity buildup, home appreciation, and the opportunity cost of tying up your down payment in a house instead of investing it.
What is included in renting costs?
Your monthly rent payment, annual rent increases, and renter's insurance are all added up over the full timeframe. Rent typically rises each year, so even a modest 3% annual increase can add up significantly over a decade.
What is included in buying costs?
The buying side includes your mortgage payment, property taxes, HOA fees, home insurance, and maintenance costs. It also factors in closing costs upfront. On the positive side, equity buildup and home appreciation (assumed at 3% per year) reduce your net cost. The opportunity cost of your down payment is calculated based on what that money could have earned if invested instead.
What is the break-even point?
The break-even point is the year where buying becomes cheaper than renting on a cumulative basis. If you plan to stay in the home longer than the break-even year, buying generally makes more financial sense. If you plan to move sooner, renting is likely the better deal.
Important considerations
This calculator provides a financial comparison only. Your decision to rent or buy should also factor in lifestyle preferences, job stability, local market conditions, and your overall financial health. The results here are estimates based on the assumptions you enter - actual costs may vary.