Rent vs Buy Calculator
Compare the true cost of renting vs buying a home. See break-even points, equity building, and make an informed housing decision.
10-Year Analysis
Recommendation
Similar
9 year break-even
Buying Saves
$6,370
over 10 years
Buying Scenario
Home purchase costs and details
Renting Scenario
Monthly rent and investment options
If renting, down payment ($80,000) would be invested at 7% return.
Comparison Period
How long you plan to stay
Options Are Comparable
After 10 years, both options have similar costs. Your decision should be based on lifestyle preferences and flexibility needs.
Price-to-Rent Ratio: 16.7 (<15 favors buying, >20 favors renting)
Net Cost Over Time
Comparison adjusted for equity and investments
Net cost accounts for equity built (buying) and investment growth (renting).
10-Year Analysis
Recommendation
Similar
9 year break-even
Buying Saves
$6,370
over 10 years
What if I stayed longer?
See how your stay duration affects the rent vs buy decision
Personalized Insights
1 insight based on your inputs
Non-Financial Factors Matter
Consider: freedom to renovate, job stability, family plans, and lifestyle flexibility. These often outweigh financial calculations.
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Quick Answer
Rent vs buy depends on how long you'll stay, home prices, rent levels, investment returns, and tax situation. Generally, buying makes sense if staying 5+ years. Our calculator compares total costs including opportunity cost of down payment.
Key Facts
- Buying usually better if staying 5+ years
- Consider opportunity cost of down payment
- Tax benefits from mortgage interest (if itemizing)
- Homeownership has hidden costs (maintenance, taxes)
- Rent increases vs fixed mortgage
- Home appreciation varies significantly by market
Frequently Asked Questions
Depends on: how long you'll stay (5+ years favors buying), local market (price-to-rent ratio), opportunity cost of down payment, and lifestyle flexibility needs. Buying builds equity but has high transaction costs. Renting offers flexibility and predictable costs.
The break-even point is when total cost of buying (including opportunity cost of down payment) equals total rent paid. Typically 3-7 years in most markets. Factors: closing costs, selling costs (~10% total), appreciation rate, and rent inflation.
Home appreciation (historically 3-4% nationally) builds equity, making buying more attractive over time. But appreciation varies widely by location and can be negative. Don't count on appreciation to make a purchase worthwhile - buy for housing value, not investment.
Often overlooked: closing costs (2-5%), maintenance (1-2% of home value/year), HOA fees, higher insurance, property taxes (reassessed at purchase), opportunity cost of down payment, and selling costs (6-10% when you move).
Divide home price by annual rent. <15: buying favors. 15-20: comparable. >20: renting may be better. Example: $400k home / $24k rent = 16.7 (comparable). This is a quick check - full analysis should include appreciation, taxes, and opportunity costs.
10-Year Analysis
Recommendation
Similar
9 year break-even
Buying Saves
$6,370
over 10 years