Rent vs. Buy Calculator

Compare the true long-run cost of renting versus buying, and find the year buying pulls ahead.

Buying
$
20%

$80,000 up front

6.5%
3.0%/yr
1.10%/yr
1.00%/yr
0.50%/yr
Renting
$
3.0%/yr
6.0%/yr

Assumed return on money not tied up in a home, e.g. the down payment and any monthly savings from renting.

7 yr

The comparison horizon for both sides.

After 7 years, renting wins by
$27,773
$173,101 net worth buying vs $200,874 renting
Breakeven year
Not within 7 yr
Monthly cost to own
$2,889
Monthly rent (today)
$2,200
Upfront to buy
$92,000
Total rent paid
$202,289
Assumes 3% closing costs when buying and 6% selling costs when the home is eventually sold, both fixed and not adjustable above.
Net worth over time
$250k$125k$0Start4yr7yr
BuyingRenting

Within your 7-year horizon, renting and investing the difference stays ahead; buying hasn't broken even yet.

What the model accounts for

This calculator runs a month by month simulation of two households with the same housing budget. The buyer puts down a down payment, pays closing costs, and carries a mortgage plus property tax, maintenance, and insurance, all scaled to the home's current (appreciating) value rather than the original purchase price. The renter puts the same upfront cash into a portfolio instead, then invests or withdraws the difference between what the buyer pays that month and what rent costs, earning the assumed investment return the whole time. Each side's net worth is the amount they'd walk away with if they cashed out today: home value minus selling costs and the remaining mortgage balance for the buyer, the portfolio balance for the renter.

How to read the breakeven year

The breakeven year is the first point where the buyer's net worth overtakes the renter's, found by comparing the two curves at each year end and interpolating between them. Before that year, the model says renting and investing the difference leaves you wealthier; after it, owning does. If your expected time in the home is shorter than the breakeven year, that's a real signal renting may be the better financial move even if buying feels like the more permanent choice. If the breakeven year shows as not reached within your horizon, it just means the simulation didn't run long enough to see the crossover, not that it would never happen.

Caveats worth knowing

Closing costs (3% of the purchase price) and selling costs (6% of the sale price) are fixed assumptions baked into the model, not inputs you can adjust here; actual costs vary by location and negotiation. The model also doesn't touch taxes in any precise way: it ignores the mortgage interest deduction, capital gains treatment on a home sale, and the fact that rent and investment returns are taxed differently than home equity. Inflation isn't modeled explicitly either; every growth rate you enter (rent, appreciation, investment return) is a nominal rate, so the comparison is only as good as those assumptions. Treat the result as a starting point for the conversation, not a precise financial forecast.