Rent vs Buy Calculator
This free rent vs buy calculator answers a harder version of "should I rent or buy?": it prices the full cost of renting vs buying a home in US dollars, month by month, so you can see the break-even rent vs buy year instead of guessing. Enter the home, loan, tax, insurance, HOA, maintenance and rent figures, and it returns the monthly cost of each path, the total cost over the years you plan to stay, the equity you would build and a one-line verdict. Nothing is uploaded and no sign-up is needed.
Down payment is $80,000. No PMI is charged, because the down payment is 20% or more of the home price.
What is a rent vs buy calculator?
A rent vs buy calculator compares what two households spend on the same roof: one that buys the home and one that rents and invests the difference. It is the honest version of "should I rent or buy?", because the monthly mortgage payment is only one line of the ledger. A buyer also pays property tax, homeowners insurance, HOA dues and maintenance, hands over a down payment and closing costs on day one, and pays selling costs on the way out. A renter keeps that upfront cash working somewhere else, which is the return this tool credits back to the renting path.
This calculator works in US dollars and charges both paths the same budget. The buying side carries the full monthly cost of owning — principal, interest, property tax, insurance, HOA dues, maintenance and PMI where it applies — plus the upfront cash, and is credited with the net proceeds of selling the home at the end of your stay. The renting side pays the rent you enter, growing each year, and invests the monthly difference at your investment return, and is credited with that side account. The lower total is the cheaper path, and the break-even year is the first year buying pulls ahead. Change how long you stay, the appreciation rate or the investment return and the answer moves, which is exactly why a single "rent or buy" verdict from a headline rule of thumb is not enough.
How to use this rent vs buy calculator
- Enter the home price and the down payment percentage. The dollar amount appears under the fields, and PMI is added automatically when the down payment is below 20% — the default is 20%, so the example carries no PMI.
- Enter the mortgage rate, pick a loan term and add other closing costs as a percentage of the price. Principal and interest uses the standard amortisation formula, the same one behind our mortgage payment calculator.
- Fill in the running costs of owning: property tax and maintenance as a percentage of the home price per year, insurance as an annual premium and HOA dues per month.
- Enter the rent for a comparable home and how fast that rent grows. Add the appreciation rate you expect for the home, the investment return you would earn on the money not tied up in it, the years you plan to stay and the selling costs you would pay when you move out.
- Read the verdict line, the monthly cost of each path and the break-even year. The totals above the summary are the money each path consumes over your horizon; the copy icon on any value copies it.
Worked example
Take the defaults: a $400,000 home, 20% down ($80,000), 2% closing costs ($8,000), so a $320,000 loan at 6.5% over 30 years. Property tax at 1.1% is $367 a month, insurance of $1,800 a year is $150 a month, maintenance at 0.625% (the $2,500-a-year rule of thumb on this price) is $208 a month, and there is no HOA and no PMI. The monthly cost of owning is therefore $2,748: $2,023 principal and interest, $367 tax, $150 insurance and $208 maintenance. Rent for the same home is $2,200 a month and grows 3% a year, so owning costs $548 more in year one.
Now run it for a 7-year stay with 4% appreciation, a 7% investment return and 6% selling costs. The home grows to $526,373; selling costs take $31,582 and the mortgage balance is still $289,332, leaving $205,458 of equity. Renting costs $202,289 in rent over the same seven years, and the $88,000 of upfront cash plus $548 a month of monthly savings compounds to $182,229 at 7% a year. Net cost: $113,342 for buying against $136,571 for renting, so buying is $23,230 ahead — and because that gap first opens in year five, the break-even year is 5.
Two changes show how much the assumptions matter. Put 10% down instead and PMI adds $150 a month, lifting the monthly cost of owning to $3,150 and pushing the break-even year to 6. Leave the down payment at 20% but let the home appreciate 2% a year instead of 4% and the break-even year jumps from 5 to 18; at 0% appreciation it stretches to year 31.
Who is this rent vs buy calculator for?
- First-time US buyers: see the full cost of owning — taxes, insurance, maintenance and the upfront cash — next to the rent you pay today, before you make an offer.
- Renters facing a renewal: if the new lease runs 12 months, the break-even year tells you whether signing again or buying now costs less over the same period.
- Anyone with a known time horizon: a two-year job posting, a three-year degree or a five-year plan all change the answer, because selling costs and a short stay rarely pay for each other.
- Buyers sizing a down payment: compare 10%, 20% and 30% down in the same screen and watch PMI appear, the monthly cost fall and the break-even year move.
Break-even by horizon
The first table is the monthly cost of owning at the defaults, with each line produced by the same formula the calculator uses. The second table holds rent, appreciation, the investment return and every other input at those defaults and varies only the number of years you stay — the same numbers the tool prints when you set the years field.
| Monthly cost of owning (defaults) | Amount |
|---|---|
| Principal and interest ($320,000 at 6.5%, 30 years) | $2,023 |
| Property tax (1.1% a year) | $367 |
| Home insurance ($1,800 a year) | $150 |
| HOA dues | $0 |
| Maintenance (0.625% a year) | $208 |
| PMI (20% down, so none) | $0 |
| Total monthly cost of owning | $2,748 |
| Years you stay | Net cost of buying | Net cost of renting | Buying − renting | Cheaper path |
|---|---|---|---|---|
| 3 | $72,501 | $59,088 | +$13,413 | Renting |
| 5 | $94,951 | $97,951 | −$3,000 | Buying |
| 7 | $113,342 | $136,571 | −$23,230 | Buying |
| 10 | $132,426 | $194,487 | −$62,062 | Buying |
| 15 | $137,606 | $293,245 | −$155,639 | Buying |
Both tables use the defaults in the calculator and the same formulas: monthly amortisation at rate/12, property tax, insurance and maintenance at their annual amounts divided by 12, home value grown at the appreciation rate, rent grown once a year, and the renter's side account compounded monthly at the investment return. Columns are rounded to the nearest dollar and the difference column is worked out from the unrounded totals, so it can differ by $1 from subtracting the two rounded columns. Cash flows are not discounted to present value — the comparison is in dollars at the sale date. A positive difference means buying costs more; a negative difference means renting does.
Common use cases
- Deciding whether to renew a lease: enter the renewal rent and see whether the break-even year falls inside the term you would sign.
- Comparing two cities: the same price buys different homes and different property tax rates. Raise the tax rate from 1.1% to 2% at the defaults and the break-even year moves from 5 to 9.
- Testing a stretch purchase: at a $550,000 price with the same $2,200 rent, buying never catches up inside 40 years in this model — a signal that the rent-to-price ratio, not the mortgage payment, is the problem.
- Judging a job move: if you expect to leave in three years, the three-year row is the honest comparison, and at the defaults it favours renting by $13,413.
- Sizing a down payment: 10% down adds PMI of $150 a month and lifts the monthly cost of owning to $3,150, while 30% down drops it to $2,495.
Pro tips
- The years you stay decide more than the price does. At the defaults, buying costs $72,501 net over three years while renting costs $59,088, and the order flips by year 5. Find your own break-even year before you fall in love with a listing.
- Appreciation is the biggest single lever. Moving it from 4% to 2% a year pushes the break-even year from 5 to 18, and 0% pushes it to 31. Treat any appreciation figure above the long-run rate of inflation as a bet, not a plan.
- Your investment return is the mirror image. The renter's side account compounds monthly, so a 9% return (instead of 7%) moves the break-even year out to 8, while 5% pulls it in to 4. Use the return you would really earn, not the best year you ever had.
- Selling costs are the toll on a short stay. At 6% they are $31,582 on a $526,373 sale; at 10% the break-even year slips from 5 to 7, and at 0% it snaps back to year 2. Ask a local agent what the real total is.
- Rent, not price, sets your break-even. At the defaults, $2,600 rent brings the break-even year forward to 3, while $1,800 rent pushes it out to 15. Compare the rent you can actually get for a similar home, not the asking rent down the street.
FAQ
Is it better to rent or buy?
It depends on how long you stay, how the home price moves and what your money would earn elsewhere. On this calculator's defaults — a $400,000 home with 20% down at 6.5%, $2,200 rent and a 7-year stay — buying is ahead from year 5, and renting is ahead before that. Change the years, the appreciation rate or the investment return and the answer can flip, which is why the break-even year matters more than a one-word verdict.
What is the 5% rule?
The 5% rule is a shortcut: owning is estimated to cost about 5% of the purchase price every year once property tax, maintenance, insurance and the cost of the money tied up in the home are counted. On a $400,000 home that is $20,000 a year, or $1,667 a month. If rent sits well below that line, buying usually looks better; if it sits well above, renting usually does. It is a quick screen, not a full calculation — it ignores appreciation, selling costs and how long you stay.
How long do I need to stay to break even?
At the defaults the break-even year is 5. Selling costs and appreciation are what stretch it: with home appreciation of 2% a year instead of 4% the break-even moves to year 18, and at 0% appreciation it moves to year 31. Buy in a market that only tracks inflation and you can wait much longer than the headline suggests.
How is the break-even year calculated?
Every month the tool adds up what the buyer pays — principal, interest, property tax, insurance, HOA dues, maintenance and any PMI — plus the down payment and closing costs, and subtracts the net proceeds the home would return if it were sold that month (its grown value, minus selling costs, minus the mortgage balance). For the renter it takes the same upfront cash and the same monthly ownership budget, spends it on rent, invests the monthly difference at your investment return and subtracts that account value at the end. The break-even year is the first year the buying total is lower than the renting total.
Does this calculator include property tax, insurance, maintenance and HOA dues?
Yes, all four. Property tax and maintenance are entered as a percentage of the home price per year, insurance as an annual premium and HOA dues as a monthly amount, and each one is added to the monthly cost of owning. In this model both paths carry the same monthly ownership budget, so those costs can never quietly favour one side.
What about PMI?
The default is 20% down, so no PMI is charged. Drop the down payment below 20% and the tool adds private mortgage insurance at 0.5% of the loan per year, charged monthly until the remaining balance falls to 80% of the purchase price. At 10% down on a $400,000 home that is $150 a month and the monthly cost of owning rises from $2,748 to $3,150.
What investment return should I use?
Use the return you honestly expect on the money that is not tied up in a house — a diversified stock and bond portfolio, in nominal terms, over the same number of years. The default is 7% a year, close to the long-run nominal return of a broad US stock index before fees and taxes. Use 4% or 5% for a cautious, bond-heavy mix. A higher investment return makes renting look better, because the renter's side account compounds faster: at 9% instead of 7% the break-even year moves from 5 to 8.
Does it account for selling costs?
Yes. The selling cost percentage comes off the sale price before the proceeds are credited to the buyer — 6% by default, a common US total for agent commissions and typical seller fees. Selling costs are the main reason a short stay rarely pays: 6% of a $400,000 home is $24,000 before any price growth, and doubling them to 10% pushes the break-even year from 5 to 7. Set them to 0% and the break-even year drops to 2.
What if I refinance?
The model runs the loan you enter to the end of your horizon at one fixed rate, so it cannot show a refinance in year 4. You can approximate one by re-running the numbers with the new rate and reading the new break-even year: at 5.5% instead of 6.5% the monthly cost of owning falls from $2,748 to $2,542 and the break-even year comes in from 5 to 4.
Is this a US calculator?
Yes. It is built for the United States in US dollars: fixed-rate mortgage amortisation, annual property tax as a share of the home price, homeowners insurance, monthly HOA dues, PMI when the down payment is under 20%, and US-style selling costs. All amounts are formatted with en-US currency rules.
Is this rent vs buy calculator free?
Yes. It is free, needs no sign-up or login, and runs entirely in your browser.
Does it save or send my data?
No. The calculator makes no network requests and stores nothing in your browser, so nothing you type leaves the page. If you want a record of a result, the copy button on the summary puts the numbers on your clipboard as text.
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