Rent vs. Buy Calculator

Compare renting with buying a similar home over the years you expect to stay. See your net worth on each path year by year, the break-even year for buying, and every assumption behind it. Your inputs stay in your browser.

Your home, rent and assumptions

Buying

The rate on a quote (not the APR).

Renting

Your comparison

The comparison assumes you sell at the end of this time.

An assumption, not a forecast. Prices can fall.

What the down payment and any monthly savings would earn if invested instead. Not guaranteed.

Costs of owning

Agent commissions and other costs of selling.

Applied only with less than 20% down, until the balance reaches 78% of the price.

Renting comes out ahead after 10 years. See full results

Example: a $400,000 home with 10% down at 6.5%, or $2,200 a month in rent, over 10 years with 3% price growth, 3% rent increases and a 5% return (illustrative assumptions, not forecasts). Enter your numbers to update.

Your rent vs. buy estimate

After 10 years
Renting comes out ahead
By about $17,491 in net worth
Break-even
Not within this time
First year buying is ahead, if you sold then
First month: owning
$3,275.44
Mortgage, PMI, tax, insurance, maintenance and HOA
First month: renting
$2,215.00
Rent and renters insurance

Both paths spend the same cash: the up-front cash of buying is invested by the renter, and each month whichever path costs less invests the difference. Results depend heavily on your growth and return assumptions; try a few.

Year by year

Net worth if you sold at the end of each year

YearBuyingRentingBuying minus renting
1 $31,304$67,731-$36,427
2 $47,216$83,699-$36,484
3 $63,763$99,901-$36,138
4 $80,977$116,331-$35,354
5 $98,888$132,983-$34,095
6 $117,528$149,849-$32,321
7 $136,934$166,923-$29,989
8 $157,142$184,195-$27,053
9 $178,189$201,655-$23,466
10 $200,119$217,610-$17,491

What makes up the difference

Where each path stands after 10 years

ItemAmount
Home value $537,567
Loan balance − $305,194
Selling costs − $32,254
Buyer’s other investments + $0
Buyer’s net worth $200,119
Renter’s investments (net worth) $217,610
Spent on owning (incl. down payment and closing) $457,017
Spent on renting $304,446

How the comparison works

The calculator follows both paths month by month and compares what you would own if you sold at the end of each year:

  • Buying: the home's value, minus the loan balance and selling costs, plus anything the buyer invested in months when owning cost less than renting.
  • Renting: the down payment and closing costs, invested instead, plus the difference in any month when owning costs more than renting.

Because both paths spend the same cash, the comparison is about what that cash builds, not just the monthly payment. In the example the first month costs $3,275.44 to own and $2,215.00 to rent.

Why time matters most

Buying has large one-off costs: closing costs going in and selling costs coming out. They take years of equity growth to recover. Over 10 years the example ends with renting ahead by about $17,491; over 20 years it ends with buying ahead by about $102,443, breaking even in year 13. If you may move within a few years, renting often costs less overall.

The assumptions that swing the answer

  • Rent: at $3,000 a month instead of $2,200, the example ends with buying ahead by about $122,405 and breaks even in year 4.
  • Investment return: at 7% instead of 5%, it ends with renting ahead by about $50,925. Returns are not guaranteed and can be negative.
  • Home prices: growth is an assumption, not a forecast. Prices can fall, and a small change compounds over many years.

Owning also carries risks and responsibilities a landlord usually carries for renters, such as repairs and rising taxes and insurance, while renting keeps you flexible (CFPB: is it the right time to buy?).

What this calculator does not include

  • Income taxes: the mortgage interest deduction, capital gains exclusions and taxes on investment returns.
  • Changes in the mortgage rate (it is a fixed-rate loan), insurance or HOA dues over time, and utility differences.
  • Security deposits, moving costs and the value of stability or flexibility.

Up-front and ongoing costs of buying are explained by the CFPB (what are all the costs of buying a home?). Results are estimates based on your assumptions, not financial advice.

Methodology and testing

The mortgage payment and PMI come from the same tested engine as our mortgage calculator. Automated tests compare every year's net worth on both paths with an independent month-by-month simulation, and check that both paths account for the same cash. How we build and test calculators.

Sources

  • Consider whether it's the right time for you to buy, Consumer Financial Protection Bureau. Owners take on maintenance, repairs, property taxes and insurance that a landlord generally carries for renters; some people rent for flexibility or because it is more financially advantageous for them.
  • What are all the costs of buying a home?, Consumer Financial Protection Bureau. Buying involves up-front costs such as the down payment and closing costs, and ongoing costs such as taxes, insurance and maintenance.
  • What is private mortgage insurance?, Consumer Financial Protection Bureau. You may be required to pay private mortgage insurance on a conventional loan with less than 20% down; it protects the lender, not you, and is not required with 20% down.
  • Home Affordability Calculator

    Maximum home price from income, debts and down payment, the debt-to-income limit that binds, and the price at other rates.

  • Mortgage Calculator

    Full monthly payment with taxes, insurance, PMI and HOA, the dates PMI can be dropped or ends, and lifetime cost.

  • Mortgage Points Calculator

    Cost of discount points, monthly savings, true break-even month, and net savings if you sell or refinance after N years.