Rent vs Buy Calculator

How the rent vs buy break-even works

The honest answer to "should I rent or buy" is almost never about comparing a rent check to a mortgage payment. It depends on how long you stay. Buying carries large upfront costs (down payment and closing costs) and a large cost on the way out (real estate commissions and selling fees). You need enough time in the home for appreciation and the equity you build to outrun those transaction costs. This calculator finds that break-even point.

It also accounts for opportunity cost, which most simple calculators ignore. A renter who spends less on housing can invest the difference, starting with the money a buyer would have sunk into a down payment. So this tool invests that gap on whichever side is cheaper each month, lets both portfolios grow at the return you set, and then compares the wealth you keep under each path. That is why a low down payment, a high expected investment return, or a short stay can tip the math toward renting even when "owning builds equity" sounds obviously better.

Two common myths get corrected here. First, renting is not simply throwing money away: a large share of an early mortgage payment is interest, and property tax, insurance, maintenance, HOA, and transaction costs are all money that never becomes equity either. Second, home prices do not only go up; set a lower appreciation rate to see how sensitive the answer is. Adjust the time horizon slider to watch the verdict flip, and use the optional tax benefit only if you actually itemize above the standard deduction. Investment gains and home appreciation are modeled before any capital-gains tax, a simplification applied symmetrically to both sides.