Rent vs Buy Calculator – Should You Rent or Buy a Home?
The rent-versus-buy decision is one of the biggest financial choices you will make. Renting offers flexibility and lower upfront costs, while buying builds equity and locks in housing costs. But which one actually comes out ahead financially? The answer depends on home prices, mortgage rates, how long you plan to stay, property taxes, maintenance, home appreciation, and what you could earn by investing the down payment instead. Our Rent vs Buy Calculator runs a year-by-year comparison so you can see the net financial advantage (or disadvantage) of buying versus renting over your planned time horizon. This article explains the key factors and links to the calculator.
Quick Answer
| Label | Value |
|---|---|
| Monthly rent | $2,000 |
| Home price | $400,000 |
| Stay duration | 7 years |
| Net buy advantage | $10,225 |
How It Works
The calculator compares total cost of renting vs total cost of buying over your time horizon. On the renting side: monthly rent (increasing ~3% per year) plus the opportunity cost of not investing. On the buying side: down payment, mortgage payments, property tax, maintenance, and insurance minus home equity built through appreciation and principal paydown. A positive net buy advantage means buying wins financially; negative means renting wins. The break-even year shows when buying starts to pull ahead. Use our Rent vs Buy Calculator with your local numbers for a personalized comparison.
Use Our Calculator
Try our Rent vs Buy Calculator for your own numbers: /calculators/rent-vs-buy-calculator
Related Calculators
It depends on your market. Use our calculator to find the break-even year. Typically 5-7 years is a common threshold, but it varies widely.
Rent increases at 3% per year, home appreciates at your input rate, mortgage is 30-year fixed, and the down payment alternative earns your input investment return rate.
The calculator focuses on recurring costs and equity. You should add closing costs (typically 2-5% of home price) to the buy side for a complete picture.