Rent vs Buy Calculator
Enter the home price, down payment, mortgage, yearly costs and your rent, and choose how many years to compare. The calculator shows the net cost of buying and of renting year by year, and the first year from which buying stays cheaper. Every growth rate is yours to set, because the answer depends heavily on them.
Last updated November 4, 2026
Result
Buying breaks even in year 6
| Measure | Value |
|---|---|
| Monthly mortgage payment | $1,918.56 |
| Net cost of buying after 10 years | $188,420.20 |
| Net cost of renting after 10 years | $243,492.80 |
| Buying costs less by | $55,072.60 |
| Break-even year | Year 6 |
| Home value after 10 years | $537,566.55 |
| Loan balance after 10 years | $267,794.32 |
| Year | Buy | Rent | Cheaper |
|---|---|---|---|
| Year 1 | $53,013.10 | $21,240.00 | Rent |
| Year 2 | $69,685.43 | $43,117.20 | Rent |
| Year 3 | $85,999.09 | $65,650.72 | Rent |
| Year 4 | $101,935.17 | $88,860.24 | Rent |
| Year 5 | $117,473.68 | $112,766.04 | Rent |
| Year 6 | $132,593.51 | $137,389.03 | Buy |
| Year 7 | $147,272.34 | $162,750.70 | Buy |
| Year 8 | $161,486.59 | $188,873.22 | Buy |
| Year 9 | $175,211.33 | $215,779.41 | Buy |
| Year 10 | $188,420.20 | $243,492.80 | Buy |
Assumptions: constant rates you entered, annual steps, the home is sold at the end of the period, and the renter invests only the down payment and closing costs. Not included: tax deductions, mortgage insurance, HOA fees, moving costs, renter’s insurance or investing the monthly difference. Change the inputs to test other cases.
Show the work
Formula: Buy = down payment + closing + mortgage payments + tax + maintenance + insurance − (value × (1 − selling %) − loan balance). Rent = rent paid − growth on (down payment + closing) invested.
- Loan: $400,000.00 − $80,000.00 = $320,000.00 at 6% for 30 years, so the payment is $1,918.56 a month.
- Cash tied up at the start: $80,000.00 down + $12,000.00 closing (3% of the price) = $92,000.00.
- Year 10 home value: $400,000.00 × (1 + 3%)^10 = $537,566.55; selling costs 6%; loan balance $267,794.32.
- Buying net cost after 10 years = $188,420.20 (year 1 alone: $53,013.10).
- Renting: rent starts at $2,000.00 a month and rises 3% a year; $92,000.00 invested at 3% offsets the rent. Net cost = $243,492.80.
- Difference: $243,492.80 − $188,420.20 = $55,072.60; buying stays cheaper from year 6.
Result: Buying breaks even in year 6
How the two costs are calculated
Buy = down payment + closing + mortgage payments + tax + maintenance + insurance − (sale value × (1 − selling %) − loan balance)
Buying is measured as the cash you spend minus the cash you would get back if you sold at the end of each year. Spending includes the down payment, the closing costs, every mortgage payment so far, property tax, maintenance and insurance. The cash back is the home value after yearly appreciation, minus selling costs, minus the loan balance still owed. The mortgage payment comes from the standard fixed-rate formula P × r ÷ (1 − (1 + r)^−n).
Property tax and maintenance are a percentage of the home value at the start of each year, so they grow as the home appreciates. Insurance is a flat yearly amount. Home value after y years is the price times (1 + appreciation)^y.
Renting is the rent you pay, starting at your monthly rent times 12 and rising by the yearly rent increase, minus what the money you did not spend on the down payment and closing costs would have earned. That money is invested at the return you enter and compounds yearly. Set the return to 0% to ignore it.
See how we calculate for the formulas, sources and review schedule behind every calculator.
Also useful alongside this calculator: Home Affordability Calculator, Closing Cost Calculator and VA Loan Calculator.
What the break-even year means
The break-even year is the first year from which buying costs no more than renting and stays that way through the end of your comparison. Early on, buying usually looks expensive, because closing and selling costs are spent up front and the mortgage payments are mostly interest. Over time, principal paid down and appreciation build equity.
If the calculator says buying does not break even in the period, try a longer time frame or check the inputs. A result of Not within this period is not a prediction that buying is a mistake, only that it does not pay back within the years you chose.
Assumptions behind the result
Every rate in the calculator is a value you type in. The defaults are round example numbers, not forecasts, and the calculator contains no market data. Home values, rents and investment returns can all move in the opposite direction, so test a few different values.
The model uses yearly steps and a fixed mortgage rate. It assumes you sell the home at the end of the period and pay the selling costs you entered. The renter invests only the down payment and closing costs. It does not invest the monthly difference between owning and renting, which could favor either side.
Not included: income tax deductions, mortgage insurance, homeowners association fees, moving costs, renter’s insurance and special assessments. Add recurring costs to the maintenance percentage or the insurance field if they apply.
Inputs worth testing
Change one input at a time. The comparison period, home appreciation and the investment return tend to move the result most. A short stay favors renting because of the costs of buying and selling, while a long stay gives the mortgage time to reduce the balance.
General information, not financial advice
This calculator gives a general estimate from the numbers you enter. It is not financial or tax advice, and your actual results can differ. Check important decisions with a qualified professional or the official source.
How to use the Rent vs Buy Calculator
- Enter the home price, your down payment, the mortgage rate and term, and your monthly rent.
- Set the years to compare and the yearly tax, maintenance, insurance and closing and selling costs.
- Set your own assumptions for home value change, rent increase and investment return.
- Read the break-even year and the year-by-year table, then Copy, Print or Share.
Worked example
A $400,000 home with $80,000 down and a 30-year mortgage at 6% has a payment of $1,918.56. Tax and maintenance are 1% each, insurance is $1,200 a year, and closing and selling costs are 3% and 6%. Home value and rent both rise 3% a year, and rent starts at $2,000 a month. The renter invests the $92,000 of down payment and closing costs at 3% a year. Buying breaks even in year 6, and the table shows the net cost of each option.
| Year | Buy | Rent | Cheaper |
|---|---|---|---|
| Year 1 | $53,013 | $21,240 | Rent |
| Year 5 | $117,474 | $112,766 | Rent |
| Year 6 | $132,594 | $137,389 | Buy |
| Year 10 | $188,420 | $243,493 | Buy |
Frequently asked questions
Is it better to rent or buy a home?
It depends on how long you stay, local prices and your own assumptions. This calculator shows the cost of each path for the numbers you enter, so you can compare them.
Why does buying look expensive in the first years?
Closing costs, selling costs and early mortgage interest are paid before much equity builds up. Those costs are spread over fewer years when you stay a short time.
What return should I enter for the invested down payment?
Use a rate you consider realistic for your own savings, or 0% to ignore it. The calculator does not supply or predict a return, so test a low and a high value.
Does the calculator include the mortgage interest tax deduction?
No. Tax deductions depend on your filing situation and are not modeled, so your real cost of buying may differ. Ask a tax professional about your own case.