Rent vs Buy Calculator
Should you rent or buy a home? Compare total monthly cost, opportunity cost of a down payment, and the true break-even year.
Last reviewed: · Reviewed by the Money Scale editorial team · How we source our data
Power mode. Every input exposed, every assumption sourced, charts and shareables.
Renting
$2,000
3.00% / year
8.00% / year
Buying
$450,000
20% down
6.360% APR
1.10% / year
1.00% / year
$150
4.00% / year
7 years
Renter net wealth (after 7y)
$105,651
Portfolio: $289,551 − rent paid: $183,899
Owner net wealth (after 7y)
$141,907
Equity after sale (incl. 6% costs) − down payment
At 7 years, buying wins by $36,255.
🏠 $141,907 owner
7-year horizon: buying wins by $36,255
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The Rent-vs-Buy Calculator runs the full cost comparison — monthly out-of-pocket, opportunity cost of a down payment invested instead, home appreciation, transaction costs, and tax effects — and surfaces the year you break even. Buying isn't always better; it depends on rates, your time horizon, and what you'd otherwise do with the cash. This calculator gives you the honest answer for YOUR inputs.
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How this calculator works
- Enter the home you'd buy (price + down payment + rate + property tax + insurance + HOA + maintenance estimate).
- Enter the equivalent rent for a comparable place (and an annual rent-increase assumption — 3% is the long-run US average).
- Set the down-payment opportunity cost: what return you'd earn if you invested the down payment instead. 7% real return is a reasonable default.
- Set home appreciation (4.2% long-run per Case-Shiller).
- Read the break-even year — the year buying becomes cheaper cumulative than renting. If you'll move sooner, renting usually wins.
owner_cost_t = PITI + maintenance + opportunity_cost(t) − home_appreciation(t) vs rent_cost_t = rent × (1 + rent_growth)ᵗCumulative cost comparison year-by-year. Owning includes principal & interest, taxes, insurance, HOA, maintenance, AND the opportunity cost of the down payment (what it would have earned invested). Renting is simply rent × an annual growth factor. Subtract home appreciation from the owner side. The break-even year is when cumulative owner cost first drops below cumulative renter cost.
- PITI
- Principal + interest + tax + insurance (the monthly mortgage payment)
- opportunity_cost(t)
- Foregone investment return on the down payment over t years
- home_appreciation(t)
- Increase in home value over t years
- rent_growth
- Annual rent increase rate (3% long-run average)
Frequently asked questions
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