Rent vs Buy Calculator

The break-even year is when the buy scenario's net position (home equity minus cumulative housing costs) first overtakes the rent scenario's net position (invested savings minus cumulative rent paid). Staying past that point tends to favor buying; leaving sooner tends to favor renting and investing the difference.

Beyond the mortgage payment, it adds property tax, maintenance (estimated at about 1% of home value per year), and home insurance to the monthly cost of owning, then compares that total against your monthly rent. A selling cost of about 5% of the home's value is deducted from equity in your final year to reflect realtor commissions.

Money you'd otherwise put toward a down payment is instead modelled as invested at your chosen investment return rate, and any monthly amount by which owning costs more than renting is treated as additional savings invested for the renter. This captures the real trade-off — not just monthly cash flow, but what your capital could earn elsewhere.

Home appreciation grows your equity each year on top of the principal you pay down through your mortgage, and a higher appreciation rate makes buying more attractive relative to investing the down payment. Because appreciation is uncertain, it's worth testing a few different rates to see how sensitive your break-even point is.

Yes — if you expect to move within a few years, if local home prices are high relative to rents, or if you can consistently earn strong investment returns on the money you'd otherwise put toward a down payment, renting and investing the difference can outperform buying. Run the calculator with your own expected years-to-stay to see where your break-even point falls.