Rent vs. Buy Calculator
Comparing rent with a mortgage payment alone leaves out taxes, upkeep, appreciation and the cost of selling. This model follows both paths year by year.
If you keep renting
If you buy
Ownership costs
Market and time assumptions
In this model, buying costs less than renting from year 8
$9,408 more to buy over 7 years
Buying costs here are net of the equity you would recover if you sold at the end of that year, after selling costs. Change any assumption and the answer can flip.
Cumulative cost over time
Renting totals rent plus renters insurance. Buying totals upfront cash and all ownership costs, less the net proceeds of selling.
| Year | Renting | Buying (net) | Equity | Difference |
|---|---|---|---|---|
| 1 | $24,180 | $64,482 | $56,024 | +$40,302 |
| 2 | $49,080 | $88,611 | $72,677 | +$39,531 |
| 3 | $74,722 | $112,367 | $89,989 | +$37,646 |
| 4 | $101,127 | $133,569 | $107,989 | +$32,442 |
| 5 | $128,319 | $154,353 | $126,710 | +$26,034 |
| 6 | $156,322 | $174,695 | $146,186 | +$18,373 |
| 7 | $185,159 | $194,567 | $166,451 | +$9,408 |
| 8 | $214,856 | $213,944 | $187,544 | −$912 |
| 9 | $245,439 | $232,794 | $209,504 | −$12,644 |
| 10 | $276,933 | $251,087 | $232,372 | −$25,846 |
A negative difference means buying costs less than renting in this model by that year.
Snapshot
- Cash needed up front
- $52,000
- Monthly ownership cost, year 1
- $3,305/mo
- Starting rent
- $2,000/mo
- Break-even year
- Year 8
- Home value at year 7
- $491,950
- Loan balance at year 7
- $325,498
Want to understand this number?
How this calculator works
The model walks forward one year at a time. Renting accumulates twelve months of rent, grown by the annual increase you set, plus renters insurance. Buying starts with your down payment and closing costs, then adds mortgage payments, property taxes, homeowners insurance, HOA dues, maintenance and any mortgage insurance still in force that year.
At the end of each year the home is valued using your appreciation assumption, the loan balance is taken from the amortisation schedule, and the equity you would keep after selling costs is subtracted from the running buying total. The first year where that net buying cost drops below the renting total is the break-even year.
What it can't tell you
- Appreciation is treated as a smooth annual rate. Real markets move unevenly and can fall.
- Rent growth, maintenance and insurance costs are all averages here; actual costs arrive in lumps.
- Tax deductions, investment returns on cash not spent, and inflation are not modelled.
- Break-even is highly sensitive to appreciation, selling costs and how long you stay — small changes can move it by years.