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Rent vs Buy Calculator
Compare the wealth you'd build renting and investing versus buying — with your break-even year, the full cost of each, and a year-by-year net-worth breakdown.
Short answer
Whether it's better to rent or buy comes down to how long you stay. Buying carries heavy upfront and selling costs, so you usually need 5–7 years for equity and appreciation to beat renting and investing the difference. This tool compares your actual numbers and shows the exact year buying pulls ahead — enter them below.
After 7 years,
Renting wins
by $29,222 in net worth
- Net worth if you buy
- $174,410
- Net worth if you rent
- $203,632
- Mortgage payment (P&I)
- $2,022.62/mo
- Break-even on buying
- Not within horizon
Buying never overtakes renting within 7 years here — renting and investing the difference builds more wealth.
| Year | Net worth (buy) | Net worth (rent) | Better |
|---|---|---|---|
| 1 | $71,013 | $107,049 | Rent |
| 2 | $86,614 | $122,395 | Rent |
| 3 | $102,828 | $138,042 | Rent |
| 4 | $119,685 | $153,988 | Rent |
| 5 | $137,213 | $170,235 | Rent |
| 6 | $155,444 | $186,784 | Rent |
| 7 | $174,410 | $203,632 | Rent |
How to read the result
Instead of comparing rent to a mortgage payment — which is misleading — this calculator compares net worth. Both a renter and a buyer start with the same cash and spend the same amount each month; whoever's housing is cheaper invests the rest. The winner is whoever has more wealth at the end of your time horizon. The break-even year is when buying overtakes renting: stay past it and buying wins, leave before it and renting wins.
What tilts the answer
- Time horizon — the single biggest factor. Short stays favor renting because transaction costs dominate.
- Rent vs. price — high rent relative to home price favors buying; cheap rent favors renting.
- Investment return — a higher return on the invested down payment strengthens the case for renting.
- Appreciation— faster home-price growth favors buying, but it's the most uncertain input.
How we calculate this
The tool compares wealth, not just monthly cost — the only fair way to weigh a down payment against rent:
- Equal starting cash. the renter and buyer both start with the same money (down payment + buy closing costs); the buyer puts it into the home, the renter invests it at your assumed return.
- Equal monthly outlay. each month both spend the larger of the two housing costs; whoever's cost is lower invests the surplus, so neither side gets a hidden cash advantage.
- Net worth at the horizon. the buyer's net worth is home value after selling costs, minus the remaining loan, plus side investments; the renter's is their portfolio. The difference is the verdict.
- Break-even year. the first year the buyer's net worth overtakes the renter's — before it, renting wins; after it, buying does.
Assumptions
- Appreciation, rent growth, and investment returns are assumptions, not forecasts — the answer is only as good as they are.
- Mortgage-interest and property-tax income-tax deductions are not modeled; for most filers taking the standard deduction they don't apply anyway.
- Maintenance defaults to ~1% of home value a year; your actual upkeep and HOA can differ a lot.
- A planning comparison, not financial advice — model a few scenarios rather than trusting a single result.
Last reviewed: July 19, 2026
Frequently asked questions
Is it better to rent or buy a house?+
It depends mostly on how long you'll stay. Buying has big upfront and selling costs, so you need enough time for home equity and appreciation to outweigh them — often 5 to 7 years. Renting is usually cheaper for short stays and keeps your down payment invested. This calculator compares your actual numbers and shows which builds more wealth over your time horizon.
How does the rent vs buy calculator decide?+
It uses the fair net-worth method: the renter and the buyer start with the same cash (your down payment plus closing costs), and each month both spend the same total — the buyer on the mortgage, taxes, insurance, and upkeep; the renter on rent. Whoever's housing costs less invests the difference. At the end of your time horizon it compares each side's net worth: the buyer's home equity after a sale plus investments, versus the renter's portfolio.
What is the break-even point for buying?+
The break-even point is the year your net worth as a buyer catches up to and passes your net worth as a renter. Before break-even, renting and investing the difference leaves you richer; after it, owning does. The calculator reports the break-even year for your inputs — if it's later than you plan to stay, renting is the financially stronger choice.
What costs does buying include besides the mortgage?+
A lot. Beyond principal and interest, owning includes property tax, homeowner's insurance, maintenance (budget about 1% of the home's value a year), any HOA dues, closing costs when you buy (2%–5%), and selling costs when you leave (around 6%, mostly the agent commission). The calculator includes all of these, plus the opportunity cost of tying up your down payment.
Why does the investment return rate matter so much?+
Because the renter invests the money a buyer would sink into a down payment and higher monthly costs. If that money earns a strong return, renting and investing can beat owning — especially over short horizons. If returns are modest or rent is high relative to buying, ownership pulls ahead. Adjust the investment-return and home-appreciation assumptions to see how sensitive the answer is.
Are these results a guarantee?+
No — they're a projection based on your assumptions about appreciation, rent growth, and investment returns, none of which are certain. Treat the output as a way to compare scenarios and understand the trade-offs, not a prediction. Small changes to the rate assumptions can flip the answer, which is exactly why it's worth modeling your own numbers.
Related tools
Related calculators
- Should I rent or buy? A decision guide
- Mortgage calculator — monthly payment and total interest.
- Closing cost calculator — the upfront cost of buying.
Results depend on your assumptions about appreciation, rent growth, and investment returns — none guaranteed. This is a planning comparison, not financial advice.