Finance
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?
The 5-year rule is a rough guideline that you need to stay in a home about five years to recover the costs of buying and selling. Selling costs alone typically run around 6% (agent commission plus closing fees), and it takes years of appreciation and mortgage paydown to offset them. If you might move sooner, renting often comes out ahead on the math. This calculator computes your actual break-even point instead of assuming a fixed five years.
Why does the calculator include an investment return rate?
Your down payment has an opportunity cost, since money tied up in a home cannot be invested elsewhere. The renter scenario invests the down payment, plus any month where buying would cost more than renting, at the rate you set. A common long-run assumption for a diversified stock portfolio is 7% per year. Adjusting this rate shows how sensitive the rent-vs-buy outcome is to what the market actually returns.
What transaction costs are included?
The calculator applies a fixed 6% selling cost to your home's projected value at the end of your time horizon, covering a typical agent commission and closing fees on the sale. It does not separately model purchase closing costs, loan origination fees, points, title insurance, or moving costs. If those apply, add them to your down payment input to get a more conservative buy-side estimate.
What home appreciation rate should I use?
US home prices have historically appreciated about 3-4% per year over the long run, roughly in line with inflation. High-demand metros have exceeded that, and slower markets have trailed it. A conservative input of 2-3% gives you a margin of safety, since appreciation is the single largest swing factor in whether buying or renting wins mathematically.
Is this financial advice?
No. The calculator produces an estimate based on the numbers you enter. It does not model the mortgage interest deduction, state and local tax rules, PMI for down payments below 20%, or your personal cash flow needs. For a six-figure decision, consult a licensed financial planner or mortgage advisor.