Should you keep renting or buy a home? Enter your current rent and potential purchase details, set your time horizon, and see which option costs less — accounting for equity build-up, investment opportunity cost, and real-world expenses most calculators ignore.
Pro tip: The break-even point is usually 5–7 years. If you’re not sure you’ll stay that long, renting often wins because closing costs and the early years of a mortgage are mostly interest.
Rent
Buy
| Year | Rent Cost | Buy Cost | Equity | Renter Invest. | Winner |
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How to Use the Rent vs. Buy Calculator
Fill in both columns: your current monthly rent on the left, and the details of a home you’re considering on the right — price, down payment, interest rate, taxes, insurance, maintenance, and HOA if applicable. Then set how long you plan to stay and the return you’d expect from investing the renter’s savings. The calculator runs a year-by-year simulation and shows you which option costs less over your time horizon.
What the Calculator Accounts For
This is not a simple “monthly payment vs. rent” comparison. On the rent side, it compounds annual rent increases and adds renter’s insurance. It also models what happens if the renter invests the money they would have put toward a down payment and the monthly savings difference. On the buy side, it calculates the full amortization schedule, property taxes, homeowner’s insurance, maintenance costs, HOA fees, and tracks how much equity you build each year through principal payments.
The Opportunity Cost of a Down Payment
A 20% down payment on a $350,000 home is $70,000 in cash. If that money were invested at a 7% annual return instead, it would grow to roughly $107,000 in seven years. This opportunity cost is the most commonly overlooked factor in the rent-vs-buy decision. Our calculator factors it in automatically by growing the renter’s hypothetical investment portfolio at your specified return rate.
Why the Break-Even Year Matters
Buying a home involves significant upfront costs: closing costs (2–5% of the purchase price), moving expenses, and the opportunity cost of tying up your down payment. In the early years of a mortgage, most of your payment goes to interest, not principal. It typically takes 5–7 years before the equity you’ve built outweighs these costs. If you move before the break-even year, renting would have been cheaper. The year-by-year table (available to subscribers) shows exactly when buying overtakes renting.
How Interest Rates Change the Equation
Interest rates have an outsized impact on the rent-vs-buy decision. At 3%, a $280,000 mortgage costs about $1,180/month. At 7%, that same loan costs $1,863 — a 58% increase in monthly payment with no additional value. Higher rates also mean more of your early payments go to interest, slowing equity accumulation. Use the rate input to model different scenarios and see how rate changes shift the break-even point.
Maintenance and Hidden Ownership Costs
The general guideline is to budget 1% of your home’s value per year for maintenance and repairs — that’s $3,500 annually on a $350,000 home. Older homes and larger properties may need 1.5–2%. This includes HVAC servicing, roof repairs, appliance replacements, plumbing, landscaping, and the inevitable surprises. Renters pay none of this — it’s the landlord’s responsibility. This ongoing cost advantage of renting is significant and often underestimated by first-time buyers.
Looking for related tools? Try our Mortgage Calculator to model your future loan payments, or explore all Home & Real Estate tools.