Buy vs Rent Calculator
Should you buy or rent? Compare the true costs of homeownership versus renting over time, including equity building, investment returns, and tax benefits.
After 10 years, renting puts you ahead by $727
Buying Net Worth
$299,568
Home Equity
Renting Net Worth
$300,295
Investment Value
| Year | Home Equity | Investment | Difference |
|---|---|---|---|
| 1 | $107,524 | $120,075 | -$12,552 |
| 2 | $125,722 | $137,264 | -$11,541 |
| 3 | $144,625 | $155,091 | -$10,466 |
| 4 | $164,265 | $173,585 | -$9,320 |
| 5 | $184,674 | $192,774 | -$8,101 |
| 6 | $205,888 | $212,691 | -$6,803 |
| 7 | $227,945 | $233,366 | -$5,421 |
| 8 | $250,882 | $254,834 | -$3,952 |
| 9 | $274,743 | $277,131 | -$2,389 |
| 10 | $299,568 | $300,295 | -$727 |
How It Works
1. Enter Your Scenarios
Input home price, down payment, and monthly rent. Add interest rate and property details for accuracy.
2. Adjust Assumptions
Set your time horizon, expected home appreciation, rent increases, and investment returns.
3. Compare Results
See which option builds more wealth, when you break even, and a year-by-year comparison.
Frequently Asked Questions
Consider Buying If:
- •You plan to stay 5+ years in the same area
- •Local rent is high relative to home prices
- •You want to build long-term wealth
- •Interest rates are favorable
Consider Renting If:
- •You might move within 3-5 years
- •Home prices are very high in your area
- •You prefer flexibility and less responsibility
- •You can invest the difference wisely
The Ultimate Buy vs Rent Calculator for Smart Financial Decisions
The decision to buy or rent a home is one of the most significant financial choices you'll make. Our free buy vs rent calculator provides a comprehensive analysis comparing the true costs of homeownership against renting over time. Unlike simple monthly payment comparisons, this tool factors in equity building, investment returns, home appreciation, and the opportunity cost of your down payment.
Why the Buy vs Rent Decision Matters
Many people assume buying is always better because "rent is throwing money away." However, the reality is more nuanced. When you rent, you're paying for flexibility and freedom from maintenance costs. When you buy, you're building equity but also paying interest, property taxes, insurance, and maintenance. The key is understanding when buying makes financial sense for your specific situation.
Finding Your Break-Even Point
The break-even point is when homeownership starts to financially outpace renting. This typically occurs between 3-7 years, depending on your local market, interest rates, and home appreciation. If you plan to move before your break-even point, renting may be the smarter financial choice. Use our calculator to find your specific break-even timeline.
Making an Informed Decision
Beyond the numbers, consider your lifestyle, job stability, and personal preferences. Homeownership offers stability and forced savings, while renting provides flexibility and lower upfront costs. Use this calculator as a starting point, but also consider non-financial factors like your desire for a permanent community, ability to customize your space, and tolerance for home maintenance responsibilities.
Ready to Buy?
Estimate your closing costs and monthly payments with our other calculators.
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