Rent vs Buy Calculator
Compare the true cost of buying versus renting over your time horizon. Includes equity, appreciation, maintenance, selling costs, and the opportunity cost of your down payment.
Buying vs renting details
Recommendation over 5 years
Renting wins
Net cost is about $51,442 lower than the alternative.
Buying does not break even within 5 years.
Monthly buying cost
$2,901
Total spent (buy)
$254,031
Total spent (rent)
$140,161
Home equity at end
$135,485
Net cost (buy)
$118,546
Net cost (rent)
$67,104
Estimate only. Not financial, tax, or legal advice. Real outcomes depend on local taxes, closing costs, market timing, and your personal situation.
Frequently Asked Questions about the Rent vs Buy Calculator
What is the 5-year rule for buying a home?
Most buyers need at least 5 years in a home to break even, because closing costs on the buy (2-5%) and selling costs (around 6%) take years of appreciation and principal paydown to recover. If you might move sooner, renting usually wins on the math.
Why does the calculator include an investment return?
Your down payment has an opportunity cost. If you rent instead of buy, that money can be invested. To compare fairly, the renter scenario assumes the down payment plus any monthly cost savings are invested at the rate you set (7% is a common long-run stock-market assumption).
What transaction costs are included?
The model charges 6% selling costs at the end of your horizon (agent commission and typical closing fees) and assumes the down payment goes in upfront. It does not separately model loan origination fees, points, or moving costs, so add those to the down payment if they matter to you.
What home appreciation rate should I use?
US home prices have appreciated about 3-4% per year over the long run, roughly matching inflation. Hot metros have seen more, slow markets less. Use a conservative number (2-3%) if you want a margin of safety, since appreciation is the single biggest swing factor.
Is this financial advice?
No. This is an estimate based on the numbers you enter. It does not include income tax effects (like the mortgage interest deduction), local market quirks, or your personal cash flow needs. Talk to a financial planner before a six-figure decision.