Free Tool — Real Estate · Created August 31, 2026

Rent vs. Buy Calculator

Both paths, side by side, over the years you actually plan to stay — no email required.

“Rent is throwing money away” is the most repeated bad math in America. This rent vs buy calculator runs both paths on the same numbers, over the years you actually plan to stay, and tells you which one leaves you further ahead.

Run Both Paths on Your Numbers

How long, and what it costs to rent

Years you plan to stay

Monthly rent for an equivalent home ($)

Rent increases (%/yr)

Renter’s insurance ($/yr)

What it costs to buy

Home price ($)

Down payment (%)

Mortgage rate (%)

Loan term

Property tax (%/yr of value)

Homeowner’s insurance ($/yr)

Maintenance (%/yr of value)

HOA or condo fee ($/mo)

PMI rate (%/yr of loan, under 20% down)

Closing costs to buy (% of price)

Costs to sell (% of sale price)

Home appreciation (%/yr)

What your money would do instead

Investment return (%/yr)

General inflation (%/yr)

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Buying: net position

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Renting: net position

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Difference

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Breakeven year

Unrecoverable cost of owning

Mortgage interest–

Property tax–

Insurance–

Maintenance–

HOA–

PMI–

Buying and selling costs–

Total–

Unrecoverable cost of renting

Rent paid–

Renter’s insurance–

Total–

A renter’s money is not idle. The down payment and closing costs stay invested, and whichever path costs less each month invests the difference — that is what the net-position numbers above capture and this column does not.

Year by year

How this works: both paths start with the same cash. The buyer spends it on the down payment and closing costs; the renter invests it. Every month, whichever path has the smaller outflow invests the difference at your investment return. At the end of your horizon the house is sold, selling costs and the remaining loan balance come off the top, and the two net positions are compared. Nothing is stored, sent, or shared — the math runs entirely in your browser. Estimates only, and the tax treatment of mortgage interest is deliberately left out (most households take the standard deduction and get no benefit from it).

How to Read Your Numbers

The output that matters is the breakeven year — the first year at which selling the house and cashing out leaves you ahead of the renter who invested the difference. Before that year, renting wins. After it, buying does, and the gap usually widens fast.

Four inputs move the breakeven year more than all the others combined:

Transaction costs. Roughly 3% to buy and 6–8% to sell means a round trip costs about a tenth of the house. That single line is why a two-year ownership almost never wins, and it is the reason the horizon question comes first.
The rent you are actually comparing to. The honest comparison is rent for a home you would genuinely live in — not the cheapest apartment in the county, and not the house you are buying if you would never rent something that nice.
Appreciation versus investment return. Set them thoughtfully. A house that grows 3% a year while a portfolio grows 7% is not a losing house — the house is leveraged and the portfolio is not — but the spread is doing a lot of the work in this model, and nobody knows either number in advance.
Maintenance. The line everyone sets to zero. Roofs, water heaters, HVAC, and the tree that comes down in a storm average out to something close to 1% of the home’s value per year over a long enough hold, and the bill arrives whether or not you budgeted for it.

Run it three times. Once with the numbers you expect, once with appreciation at zero, and once with the horizon cut in half because life moved you. If buying still wins in all three, the answer is not close. If it only wins in the first, you are betting on the forecast rather than the house.

Why “Unrecoverable Costs” Is the Right Frame

The reason the throwing-money-away line survives is that it compares the wrong things: all of rent against only the principal slice of a mortgage payment. The fair comparison is rent against the part of owning you never get back — mortgage interest, property tax, insurance, maintenance, HOA dues, PMI, and the transaction costs on both ends. Principal is not in that list, because principal is savings moving from one pocket to another.

The two columns above show that comparison directly. On a 30-year loan in the early years, interest alone is most of the payment, which is why the owning column is so much larger than new buyers expect. What the columns cannot show is the renter’s side of the ledger — the down payment still invested and compounding — and that is exactly what the net-position numbers add.

The horizon test, in one line: if you cannot say with a straight face that you will still be in this house in five to seven years, the calculator will usually tell you to rent, and it will usually be right. Be ready for it to push the crossover out further than that: with 30-year rates near 6.65% and price-to-rent ratios where they are in 2026, the defaults on this page do not break even until year nine.⁠[1] The full argument, and the cases where each side genuinely wins, is in Renting vs. Buying, Honestly.

Where to Go Next

Once the calculator points at buying, the next questions are mechanical rather than philosophical: what the payment is really made of, what a down payment costs you in PMI, and how long that PMI lasts. Those live in The First Home Purchase, along with a plain-language glossary of mortgage terms if PITI, LTV and escrow are still new words.

If the answer is renting for now, price the rent side honestly with Moving Out for the First Time, and make sure the down-payment fund is sitting in the right place on The Financial Order of Operations rather than jumping the queue. And if the plan is to buy a home a tenant helps pay for, run the numbers again with the rent line set to what you would collect — that is House Hacking & the First Rental.

References & Resources

Freddie Mac. Primary Mortgage Market Survey, week of August 20, 2026 — 30-year fixed averaging 6.65%, 15-year 5.95%. The default rate in this calculator. Current rates
National Association of Realtors. Metropolitan Median Area Prices and Affordability, Q2 2026. National median existing single-family price $434,900, up 1.5% year over year. See the release
CFPB: Owning a Home — Closing-cost worksheets and the Loan Estimate walkthrough behind the transaction-cost defaults.
Estimates only. Property tax rates, insurance premiums and maintenance costs vary enormously by state and by house; replace the defaults with quotes for the specific property before deciding anything.