Buy vs Rent Calculator
Should you buy a home or keep renting? Enter your numbers to find the break-even year and see which path builds more wealth.
Quick start — click a scenario or enter your own numbers:
$80,000
equivalent rent for this home
Mortgage
$2,023/mo
Total buy cost
$2,823/mo
incl. tax + maint.
Monthly rent (yr 1)
$2,000/mo
After 10 years — net wealth comparison
Renting wins by $11,772
Renting stays ahead for the full 30-year window
Monthly rent exceeds buy cost at year 13
Net Wealth: Buy vs Rent + Invest
Monthly Payment Over Time
Buy cost = mortgage + property tax + maintenance (fixed). Rent increases 3%/yr. Monthly rent exceeds buying cost at year 13.
Buy the Home
Rent + Invest
Common Questions
How is the break-even year calculated?
The break-even year is when your home equity (home value minus remaining mortgage balance) exceeds what a renter's investment portfolio would be worth — starting with the down payment and closing costs invested, plus monthly savings when buying costs more than rent. Before this point, renting and investing is ahead. After it, buying wins.
What closing costs should I use?
Typical US closing costs are 2–5% of the home price, covering loan origination fees, title insurance, appraisal, and prepaid interest. For a $400K home that's $8,000–$20,000. Use 2.5% as a conservative default. These costs penalize buyers early and are why the renter's portfolio starts ahead.
When does buying make more financial sense?
Buying wins when you stay for many years (typically 7+), when your local rent is high relative to home prices (low price-to-rent ratio), when home appreciation is strong, and when you have stable income and credit. Short-term ownership almost never beats renting financially due to closing costs and interest-heavy early payments.
What rent increase rate should I use?
US rents have historically increased about 3% per year on average nationally, but hot urban markets can see 5–8% in any given year. Use 3% for a conservative estimate. Higher rent growth makes buying look better over time, since your mortgage payment stays fixed while rent keeps rising.
Why does the renter's portfolio start ahead?
The renter starts with the down payment and closing costs fully invested. On a $400K home with 20% down and 2.5% closing costs, that's $80K + $10K = $90K earning market returns from day one. The buyer must overcome this head start through home appreciation and equity building — which is why buying takes years to catch up.