⚖️ Rent vs. Buy Calculator
Compare the true cost of renting versus buying over 5, 10, and 30 years
How This Calculator Works
This calculator compares the true long-term cost of renting versus buying over 30 years. Renting costs include monthly rent (increasing annually with inflation), renters insurance, and opportunity cost of not building equity. Buying costs include mortgage payments, property taxes, insurance, maintenance, HOA fees, and closing costs, offset by home appreciation, mortgage interest tax deduction, and equity buildup.
The calculator projects both scenarios year-by-year, accounting for: rent increases (typically 3% annually), home appreciation (typically 3-4% annually), mortgage paydown (more equity each year), maintenance costs (1-2% of home value annually), and tax benefits. The break-even point shows when buying becomes cheaper than renting on a cumulative basis.
Example Calculation
Example: $300k Home vs $2,000/Month Rent
Buying: $300k home, 20% down ($60k), 7% rate, 30-year mortgage. Monthly: $1,596 P&I + $300 tax + $150 insurance + $250 maintenance = $2,296 total. After 10 years: Home worth $405k (3.5% appreciation), owe $204k, equity $201k, paid $275k total.
Renting: $2,000/month rent, 3% annual increases. After 10 years: Paid $280k total, zero equity, rent now $2,688/month.
Result: After 10 years, buyer has $201k equity despite spending similar amounts. Break-even typically occurs at 5-7 years. The longer you stay, the more buying wins due to appreciation and equity buildup versus rent increases with zero equity.
Common Questions
How long do I need to stay for buying to be worth it?
General rule: 5-7 years minimum. Closing costs ($6k-$12k) and selling costs (6% realtor fees) mean you need time for appreciation and mortgage paydown to offset these transaction costs. If you'll move in 2-3 years, renting is usually cheaper. If staying 10+ years, buying almost always wins due to equity buildup and rent increases.
What if home prices don't appreciate?
Even with 0% appreciation, buying can win due to forced savings (equity buildup) and fixed housing costs (mortgage stays same, rent increases). However, if home values decline 10-20%, you lose significantly. Markets with strong job growth and limited housing supply appreciate reliably. Avoid buying in declining cities or overheated markets.