Money
Rent vs Buy
Compare the true cost of buying a home versus renting over time - and find your breakeven year.
Buying
Renting
Assumptions
Verdict
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- Total cost of buying-
- Total cost of renting-
- Breakeven year-
- Home equity at end-
Simplified comparison for planning only. Ignores maintenance, selling costs, and the standard deduction; the tax benefit assumes you itemize deductions. Not financial advice.
How to use this calculator
1. Enter the home price, your down payment, mortgage rate, and loan term under Buying. 2. Add ownership costs: property tax, insurance, HOA dues, and closing costs. 3. Enter a comparable monthly rent and how fast rents rise in your area. 4. Set the comparison length and your tax and investment assumptions. 5. Read the verdict, note the breakeven year, and compare the two cost lines on the chart.
Worked example
A $400,000 home with 20% down at 6.5% over 30 years, versus $2,200 per month rent rising 3% a year, over 10 years: buying costs about $98,960 in net terms while renting costs about $215,468. Buying saves roughly $116,508, with breakeven in year 2.
What this means and what to do next
If buying wins by a wide margin and you plan to stay past the breakeven year, ownership is the stronger financial move. If renting wins, or the breakeven sits beyond your likely stay, renting and investing the difference usually comes out ahead. Either way, re-run the numbers with your actual quotes before deciding.
How the math works
Each year, the buying side adds mortgage payments, property tax, insurance, and HOA dues, then subtracts the equity you built (appreciation plus principal repaid) and the tax savings on mortgage interest. The renting side adds rent and renter's insurance, then subtracts the investment growth on the down payment and closing costs you kept invested instead. The breakeven year is the first year buying's cumulative net cost drops below renting's.