Buy versus rent compares the total cost of owning a home over a number of years with renting a similar one, counting the down payment, the mortgage, taxes, insurance, maintenance, appreciation and what the down payment could have earned elsewhere. The answer depends on how long you stay; the calculator shows the break-even year.
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 |
Input home price, down payment, and monthly rent. Add interest rate and property details for accuracy.
Set your time horizon, expected home appreciation, rent increases, and investment returns.
See which option builds more wealth, when you break even, and a year-by-year comparison.
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.
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.
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.
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.
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Key facts
Total cost of owning = down payment + mortgage payments + tax + insurance + maintenance + buying and selling costs − equity built − appreciation. Total cost of renting = rent (growing each year) + renter’s insurance − what the down payment would have earned invested. Break-even is the year the two totals cross.
Whether buying wins in five years depends mostly on appreciation and how long you stay; the calculator shows the break-even year for your numbers instead of a single answer.
Buying carries roughly 2% to 5% in purchase costs and 6% to 8% in selling costs, so it needs time for appreciation and principal paydown to cover them. In most markets that is three to seven years. A shorter stay usually favors renting even when the monthly payment is similar.
No. Rent buys housing for the month, the same way mortgage interest, tax, insurance and maintenance do; only the principal part of a mortgage payment builds equity. In the first years of a 30-year loan, most of the payment is interest, so the equity edge of owning is smaller than it looks.
Last reviewed September 8, 2026 by the EstatePass editorial team. Formulas and program limits are checked against the published rules; figures on this page are arithmetic, not market statistics.
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