Rent vs. buy calculator

Run your own rent vs. buy numbers

LABELED ESTIMATE. The investment side of renting assumes the down payment and closing costs are invested on day one, and that the monthly difference between what a buyer pays (mortgage, tax, insurance, maintenance) and what a renter pays in rent is invested every month, at the return rate you set. Home price appreciation and investment returns are both assumptions you choose, not forecasts. Outcomes depend heavily on the numbers you enter.

Is renting really throwing money away?

No. That line assumes a rent payment buys nothing while a mortgage payment buys everything, and neither half is true. A renter's payment buys housing for the month, same as a mortgage payment does; the part of a mortgage payment that builds wealth is the principal, not the interest, and early in a loan most of the payment is interest. Buying also carries costs renting never touches: closing costs to purchase, property tax and insurance every year, maintenance for the things that break, and selling costs (typically an agent commission plus other fees) whenever the home is sold. None of those build equity. They are the buyer's version of "money that does not come back," the same category renters get accused of alone.

What does it actually cost to buy a home?

The buyer's true cost over any horizon is not the sale price and not the mortgage payment. It is everything paid out (down payment, closing costs, mortgage interest and principal, property tax, insurance, maintenance, and selling costs at the end) minus what comes back at sale: the home's value at that point, minus whatever mortgage balance is still owed. What survives that subtraction is the real number: mortgage interest, taxes, insurance, maintenance, and closing plus selling costs, minus however much the home appreciated. The down payment and the principal portion of every mortgage payment are not lost money; they come back as equity (assuming the home does not lose value), which is exactly why they get added back out in the breakdown above.

What does it actually cost to rent instead?

A renter's cost is the cumulative rent paid, which rises each year, minus one thing a buyer does not get: the growth on money the renter never tied up in a house. That is two pieces. First, the down payment and closing costs a buyer would have spent stay invested instead, earning a return from day one. Second, in months where owning would cost more than renting (which is common once mortgage interest, tax, insurance, and maintenance are added up), the renter can invest that monthly gap too. Only the growth on that money counts as an offset to rent; the principal invested is money that would have been spent one way or another, so it is not a "gain" by itself.

Why does how long you stay change the answer?

Closing costs and selling costs are largely fixed regardless of how long you own the home, so they get divided over fewer years on a short stay and more years on a long one. A buyer who sells after two years is paying a full round of closing and selling costs, plus most of two years of mostly-interest mortgage payments, for barely two years of equity growth and appreciation to show for it. That is why short horizons tend to favor renting: the fixed costs of the buy-then-sell round trip dominate. Stretch the horizon out and the fixed costs shrink as a share of the total, mortgage payments shift more toward principal, and appreciation has more years to compound, which is why longer horizons tend to favor buying. The National Association of Realtors' 2025 buyer and seller survey put the median time a seller had owned their home at 11 years, a record high; plug your own expected horizon into the calculator above rather than assuming a "typical" stay, since the gap between a 3-year stay and an 11-year stay can flip the verdict entirely.

What is the opportunity cost of a down payment?

Opportunity cost is what you give up by choosing one use of money over another. A down payment sitting in home equity is not earning a stock-market return, a savings-account rate, or whatever else it might have earned invested instead; it is earning the home's appreciation rate, which is a different number and, over most long stretches of history, a lower one than diversified stock returns. That does not make buying wrong, since a home also provides housing you would otherwise pay rent for, but it does mean a fair comparison has to credit the rent path with whatever that money would have grown into. The calculator does this explicitly: the "investment return" field is what you assume the down payment (and any monthly savings from renting) would earn, and the renting breakdown shows the resulting gain as a separate, visible line rather than folding it invisibly into the total.

When does buying break even against renting?

Break-even is the horizon at which the net cost of buying drops to or below the net cost of renting, given everything else held constant. Below that many years, renting tends to look cheaper because the fixed costs of a purchase and sale have not yet been spread over enough time; beyond it, buying tends to pull ahead as those costs shrink as a share of the total and equity keeps compounding. In the default example above ($425,000 home, 20% down, 6.5% mortgage, 6% assumed investment return), that crossover lands around year 16. Raise the mortgage rate, lower the assumed appreciation, or raise the assumed investment return, and the crossover moves later (renting stays ahead longer); do the reverse and it moves earlier. There is no universal break-even number; it is entirely a function of the inputs you choose, which is the whole reason to run your own numbers rather than trust a rule of thumb.

What this calculator does not account for

• Mortgage interest and property tax deductions. Some homeowners who itemize can deduct part of their mortgage interest and property tax on federal returns; this model taxes neither path, so it understates buying's after-tax advantage for filers who itemize and benefit from those deductions.
• Rent control or below-market renewals. The model assumes rent rises by a constant percentage every year. A rent-controlled unit or a landlord who under-raises rent would make renting look better than the calculator shows; a landlord who raises rent sharply at renewal would make it look worse.
• Refinancing. The mortgage rate you enter is assumed fixed for the entire horizon. A future refinance to a lower rate is not modeled.
• Taxes on investment gains. The renting path assumes the full investment return compounds with no tax drag, which overstates the after-tax benefit of the rent path for money invested outside a tax-advantaged account.
• Moving costs beyond selling costs. Neither path charges a mover, security deposit, or the time cost of packing and moving, since both a renter and a buyer eventually face those regardless of which path they choose.
• Renters insurance. Typically far smaller than homeowners insurance and not modeled here, since it does not change which side of the comparison wins by much.

Every input in the calculator is something you should replace with your own numbers, especially the mortgage rate, the appreciation rate, and the investment return, since those three drive the verdict more than any other fields. For the mortgage math itself, amortization schedule, and how extra payments change it, see the mortgage calculator.

The flat truth: it depends on how long you stay and what you assume, not on a slogan

Buying is not automatically building wealth and renting is not automatically wasting money; both have real costs, and which one wins is arithmetic, not virtue. The horizon matters more than almost anything else in the comparison, because closing and selling costs are largely fixed while the benefits of owning (equity, appreciation) need years to accumulate. The mortgage rate and the assumed investment return matter almost as much, since they set the "price" of borrowing against the "price" of not investing the down payment. Run your own numbers above with your actual rent, your actual mortgage quote, and a realistic (not hopeful) appreciation and investment assumption, and treat the output as a labeled estimate, not a guarantee: change any one assumption and the answer can flip. For the full picture of what owning costs beyond this comparison, see the homeownership hub.