Rent vs. Buy Calculator

Buying's net worth = home value at your horizon (appreciated) − remaining mortgage balance − estimated selling costs. Mortgage interest, property tax, insurance, maintenance, and HOA are treated as pure costs along the way — they don't build equity, only the principal portion of your payment does.

Renting's net worth = your down payment and closing costs, invested instead of spent on a home, growing at your assumed investment return — plus, every month, whichever side (rent or the full cost of owning) is cheaper adds its savings to that same investment balance. This is the "invest the difference" method used by most credible rent-vs-buy models, including the original approach popularized by The New York Times' calculator.

Worked example: a $400,000 home with a $80,000 down payment, 6.5% mortgage, and $2,200/month comparable rent, with standard assumptions (3.5% appreciation, 3% rent growth, 6.5% investment return), breaks even around year 10 — renting comes out ahead for stays shorter than that (by about $32,000 at 3 years, narrowing to nearly a wash by year 10), and buying pulls further ahead the longer you stay past it (about $37,000 ahead at 15 years, $277,000 ahead at 30 years).

Buying carries large one-time costs — closing costs when you buy, agent commissions when you sell — that get amortized over however many years you actually stay. Spread over 3 years, those costs are a heavy drag; spread over 15 years, they barely matter next to the equity built and appreciation earned. This is why the single most important input in this calculator is often not the interest rate or the rent, but how long you realistically expect to stay.

If your timeline is genuinely uncertain — a new job, a growing family, an unclear relocation — running the calculator at both a short and a long horizon shows you the actual range of outcomes rather than a single number that assumes certainty you don't have.

You cannot work out the break-even year by hand, because it compares home equity that grows with appreciation against an investment balance that compounds. A few inputs shift it the most:

• A higher assumed investment return pushes the break-even year later, since renting looks better for longer.
• A higher assumed home appreciation rate pulls it earlier, since buying catches up sooner.
• Higher buying and selling costs push it later, because they are a fixed drag no matter how long you stay.

Renting usually starts ahead. A buyer has already paid closing costs at month one, while a renter has the full down payment invested. Buying overtakes once principal paydown and appreciation build equity faster than that investment grows. Run a conservative case and an optimistic case to see the real range. For the wider question of whether renting is "throwing money away", read our guide Is renting throwing money away?.

• Mortgage interest and property tax deductions, which depend on your specific tax situation.
• Non-financial value — stability, control over your space, or the flexibility to relocate quickly.
• Local market conditions that can push real appreciation or rent growth well outside a general assumption.
• Whether a renter would actually invest the difference rather than spend it.

Once you have a sense of the financial answer, our House Affordability Calculator checks what price you could actually qualify for, and our Mortgage Calculator builds out the full payment and amortization schedule.