How to use the Rent vs Buy Calculator
- Enter the home you would buy and the rent for a comparable place.
- Set how long you expect to stay — this matters more than anything else.
- Adjust appreciation, rent growth and the return you could earn by investing the down payment instead.
- Read which option costs less over your time frame and the year buying breaks even.
How it works
The net cost of buying is everything you pay (down payment, ~3% closing costs, mortgage payments, property tax, insurance and maintenance) minus the equity you walk away with after selling (home value minus selling costs minus the remaining loan), plus the investment return you gave up on the cash you put in.
Buy net cost = cash paid − (value × (1 − selling costs) − loan balance) + lost investment returnThe cost of renting is the rent you pay, growing each year by the rent increase rate. The break-even year is the first year buying becomes cheaper.
Frequently asked questions
How long do I need to stay for buying to make sense?
Usually five years or more. Buying and selling costs (often 8–10% of the price combined) take several years of appreciation and principal payments to recover.
Why include investment return?
Money used for a down payment could otherwise be invested. Ignoring that opportunity cost makes buying look cheaper than it really is.
Is mortgage interest deductible?
Only if you itemize deductions, and most households now take the standard deduction. This calculator does not assume any tax benefit.