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Compare renting vs buying: enter rent, home price, down payment, rate, term, and years to see break-even and total cost.
Compare renting vs buying: enter rent, home price, down payment, rate, term, and years to see break-even and total cost.
Enter values above and click Calculate — results will appear here with the formula explained.
This simplified comparison sums rent paid vs buying costs: down payment plus mortgage payments over the horizon, minus principal equity built (down + principal paid). It ignores home appreciation, rent increases, maintenance, taxes and tax benefits for clarity — treat it as a directional baseline, not a full net-present-value model. The mortgage payment uses the standard amortizing loan formula and equity is loan principal repaid after N years.
Horizon dominates everything: buying usually improves with longer stays as equity builds while rent compounds upward. The crossover (break-even tenure) in most US markets lands around 5–10 years depending on price-to-rent ratios, rates and appreciation — below ~3 years renting almost always wins once transaction costs (6–10% round-trip: closing, agent fees, moving) are counted. Run 5, 7 and 10-year horizons here and watch the verdict flip.
The excluded variables each push predictably: 3% yearly rent growth adds roughly 10–16% to multi-year rent totals; 3–4% home appreciation credits buyers symmetrically; 1%-of-price yearly maintenance plus HOA debits buying; mortgage-interest and property-tax deductions (for itemizers) credit buying; and the down payment's opportunity cost (what it would earn invested, often modeled near 5–7%) debits buying. Adjust the baseline with these before deciding — for YMYL housing decisions, pair with a full rent-vs-buy spreadsheet and local market data.
Price-to-rent ratio gives the one-glance version: annual rent divided by home price. Below ~5% (a $350k home renting for under ~$1,450/mo) buying often wins long-term; above ~7–8% renting usually wins; between is judgment territory. Expensive coastal markets routinely print ratios where lifelong renting plus investing the difference beats stretching to buy — run the ratio before falling in love with a listing.
Non-financial factors legitimately override close calls: mobility for career moves, school stability, renovation freedom, maintenance tolerance, and the forced-savings discipline mortgages impose on undisciplined savers. When the math is within ~10–15% either way, choose the life fit — but quantify first so the premium for flexibility or stability is a known number, not a vague feeling.
If buying wins, the next step is affordability discipline: keep total housing near 28% of gross income, hold 3–6 months of housing costs liquid after closing, and budget 1% yearly maintenance from day one. A 'winning' buy that leaves zero reserves converts the first furnace failure into high-interest debt — which this site's debt calculators model all too vividly.
Compare renting vs buying: enter rent, home price, down payment, rate, term, and years to see break-even and total cost. Formula: Rent cost = rent*12*years. Example: Rent $1,800/mo for 7y = $151,200.
This simplified comparison sums rent paid vs buying costs: down payment plus mortgage payments over the horizon, minus principal equity built (down + principal paid). It ignores home appreciation, rent increases, maintenance, taxes and tax benefits for clarity — treat it as a directional baseline, not a full net-present-value model. The mortgage payment uses the standard amortizing loan formula and equity is loan principal repaid after N years.
Horizon dominates everything: buying usually improves with longer stays as equity builds while rent compounds upward. The crossover (break-even tenure) in most US markets lands around 5–10 years depending on price-to-rent ratios, rates and appreciation — below ~3 years renting almost always wins once transaction costs (6–10% round-trip: closing, agent fees, moving) are counted. Run 5, 7 and 10-year horizons here and watch the verdict flip.
The excluded variables each push predictably: 3% yearly rent growth adds roughly 10–16% to multi-year rent totals; 3–4% home appreciation credits buyers symmetrically; 1%-of-price yearly maintenance plus HOA debits buying; mortgage-interest and property-tax deductions (for itemizers) credit buying; and the down payment's opportunity cost (what it would earn invested, often modeled near 5–7%) debits buying. Adjust the baseline with these before deciding — for YMYL housing decisions, pair with a full rent-vs-buy spreadsheet and local market data.
Price-to-rent ratio gives the one-glance version: annual rent divided by home price. Below ~5% (a $350k home renting for under ~$1,450/mo) buying often wins long-term; above ~7–8% renting usually wins; between is judgment territory. Expensive coastal markets routinely print ratios where lifelong renting plus investing the difference beats stretching to buy — run the ratio before falling in love with a listing.
Non-financial factors legitimately override close calls: mobility for career moves, school stability, renovation freedom, maintenance tolerance, and the forced-savings discipline mortgages impose on undisciplined savers. When the math is within ~10–15% either way, choose the life fit — but quantify first so the premium for flexibility or stability is a known number, not a vague feeling.
If buying wins, the next step is affordability discipline: keep total housing near 28% of gross income, hold 3–6 months of housing costs liquid after closing, and budget 1% yearly maintenance from day one. A 'winning' buy that leaves zero reserves converts the first furnace failure into high-interest debt — which this site's debt calculators model all too vividly.
Rent $1,800/mo for 7y = $151,200. Buying $350k with $50k down at 6.5% for 30y: payment about $1,896/mo, 7y payments $159k + $50k down - ~$35k equity ≈ $174k net, so renting is cheaper for 7y in this simplified view. Extend to 12 years and the fixed payment versus compounded rent plus ~$70k equity flips the verdict toward buying — horizon is the decision.
Formulas are standard public references (see our methodology). External standards are cited in the text where they apply.
Last reviewed: September 2026 · Report an error