Should you rent or buy a home? This calculator compares the true total cost of renting versus buying over your specified time horizon. It accounts for mortgage payments, down payment opportunity cost, property taxes, maintenance, rent increases, home appreciation, and the investment returns you could earn on saved capital. Make a data-driven decision about the biggest financial commitment of your life.
Renting is better over 10 years
Break-even point: Year 1
Buy Net Cost (10yr)
$384,486
Rent Total (10yr)
$275,133
Break-even Year
Year 1
Buying becomes cheaper after this year
Key Assumptions:
Property tax: 1.2%, Maintenance: 1%, Down payment: $70,000
Whether to rent or buy a home is one of the biggest financial decisions you will make. Despite the common belief that buying is always better, the math depends on local home prices, rental rates, how long you plan to stay, mortgage rates, and opportunity cost of the down payment.
Buying a home costs more than just the mortgage. Factor in: closing costs (2-5% of home price), property taxes (1-2% annually), homeowner's insurance, maintenance and repairs (1-2% annually), HOA fees if applicable, and mortgage interest. A $400,000 home at 7% interest costs over $520,000 in total interest over 30 years.
Renting costs more than just the monthly rent. Factor in: renter's insurance, annual rent increases (typically 3-5%), security deposits, and the lack of equity building. However, renters avoid maintenance costs, property taxes, and can invest their would-be down payment in the stock market.
There is typically a break-even point where buying becomes cheaper than renting. In many markets, this is 5-7 years. If you plan to stay shorter than the break-even period, renting is usually financially superior. The longer you stay in a purchased home, the more buying tends to win.
A $80,000 down payment invested in the stock market at 8% return would grow to approximately $173,000 in 10 years. This opportunity cost is often overlooked when comparing renting to buying. The down payment is not "saved" money — it is money transferred from liquid investments to an illiquid asset.