Should I rent or buy a home?

Whether to rent or buy depends on how long you plan to stay, local home prices vs rent prices, your down payment amount, and investment alternatives. Generally, buying becomes cheaper than renting after 5-10 years, but this varies significantly by location and circumstances.

What is the break-even point for rent vs buy?

The break-even point is when the total cost of buying equals the total cost of renting. This typically ranges from 3-10 years depending on home prices, rent costs, appreciation rates, and investment returns. Our calculator shows your specific break-even timeline.

Why does opportunity cost matter in rent vs buy?

When you buy a home, your down payment is tied up in the property. If you rent instead, that money could be invested in the stock market. This opportunity cost is often the biggest factor in the rent vs buy decision, yet many calculators ignore it.

Rent vs Buy Calculator | Should You Rent or Buy a Home?

How Long Will You Stay?

This is the most important factor

Years You Plan to Stay

State ?Used to estimate property taxes.

Household Income (before taxes) ?Used to estimate your tax bracket for mortgage interest deduction.

Filing Status

If You Rent

What would rent cost for a similar place?

Monthly Rent ?For a fair comparison, use what rent would cost for a similar home.

Renter's Insurance

$/mo

Security Deposit ?Usually 1-2 months rent. Returned when you move out.

Broker Fee ?Common in NYC, Boston. Usually 1 month or 12-15% of annual rent.

Expected Rent Increase Each Year ?Rent typically goes up 3-5% per year.

Opportunity cost: If you rent, you keep your down payment money. We calculate what it could grow to if invested in the stock market instead.

If You Buy

The home you are considering

Home Price

Down Payment

Down Payment %

Interest Rate ?Auto-estimated based on loan term. Adjust if you have a quote from a lender.

Loan Term

More OptionsGrowth rates, costs, inflation

These assumptions significantly affect the outcome. Adjust based on your expectations.

Property Tax Rate

Home Insurance

$/yr

Home Value Growth ?Historical average is 3-4% nationally.

%/yr

Stock Market Return ?If you rent, your down payment could be invested. Stocks historically return 7-10%.

%/yr

Inflation Rate ?Used to convert future costs to today's purchasing power. Historical average is 2-3%.

%/yr

Repairs & Maintenance

%/yr

Buying Closing Costs ?Fees paid when purchasing: lender fees, title insurance, appraisal, etc. Typically 2-5% of home price.

Selling Costs ?Costs when you sell the home: real estate agent commission (5-6%) plus title and transfer fees. Typically 7-10% total.

HOA Fees

$/mo

Extra Utilities ?Homes typically cost more in utilities than apartments due to larger space, yard maintenance, water/sewer, etc.

$/mo

After 5 Years

Renting Costs Less

You'd have about $42,000 more by renting

Net Cost of Renting$165,000

Net Cost of Buying$207,000

You save by renting

$42,000

When Does Buying Win?

You: 5 yrs

Break-even: 15 yrs

0 years30 years

Renting wins

Buying wins

Your plan

With these numbers, buying starts to cost less after about 7 years. If you might move sooner, renting could save you money.

What If Assumptions Change?

Your outcome under different scenarios

Scenario	Rent	Buy	Winner

Renting Breakdown

You Pay

Total rent over 5 years-$162,000

Renter's insurance-$1,200

Upfront costs (deposit + broker)-$2,500

You Gain

Down payment + closing costs invested ?If you rent, you keep your down payment and don't pay closing costs. This shows what that money could grow to if invested.+$126,000

Security deposit returned+$2,500

Net cost of renting$37,200

Buying Breakdown

You Pay

Down payment-$90,000

Mortgage payments-$142,000

Property taxes-$38,700

Insurance + HOA + utilities-$16,000

Repairs & maintenance-$22,500

Closing costs (when buying) ?Fees paid at purchase: lender fees, title insurance, appraisal, attorney, etc.-$13,500

Selling costs (when you sell) ?Costs when you eventually sell: real estate agent commission plus closing fees.-$41,700

You Gain

Home equity (ownership stake)+$132,000

Home value appreciation+$71,000

Tax savings+$0

Net cost of buying$79,400

Most homeowners don't get a tax break from their mortgage anymore. The standard deduction is usually higher than mortgage interest.

All figures in today's dollars. ?Future costs are converted to today's purchasing power using the inflation rate. This makes it easier to understand what these amounts really mean.

Assumptions Used

Home value growth3%/yr

Rent increases4%/yr

Investment returns7%/yr

Inflation2.5%/yr

Repairs1%/yr

Selling costs8%

Should You Rent or Buy?

When Does Buying Win?

What If Assumptions Change?

Renting Breakdown

Buying Breakdown

Assumptions Used