Rent vs. Buy Calculator
At 6.625% rates and 3% annual appreciation, buying typically beats renting after about 4-5 years in most U.S. metros — but your break-even depends on rent, home price, and how long you plan to stay. Enter your numbers below for the exact comparison.
Rental Information
Returns if you invested the down payment and monthly savings
Purchase Information
% of home value per year
Recommendation
Monthly Cost Breakdown (Buying)
Year-by-Year Net Worth Comparison
| Year | Home Value | Buy Net Worth | Rent Net Worth |
|---|---|---|---|
| 1 | $515k | $75k | $81k |
| 3 | $546k | $29k | $41k |
| 5 | $580k | $-15k | $0k |
| 7 | $615k | $-55k | $-43k |
| 10 | $672k | $-107k | $-110k |
| 15 | $779k | $-171k | $-230k |
| 20 | $903k | $-198k | $-359k |
| 25 | $1047k | $-180k | $-492k |
| 30 | $1214k | $-101k | $-626k |
What Is Rent vs. Buy Analysis?
A rent vs. buy analysis compares the total financial outcome of renting a home versus buying one over a 30-year period. It factors in mortgage payments, property taxes, home appreciation, rent increases, and the opportunity cost of your down payment if invested instead.
How Does the Rent vs. Buy Calculator Work?
Our calculator models both scenarios year by year. On the buy side, it tracks home value appreciation, equity buildup, and all ownership costs. On the rent side, it invests your down payment and any monthly savings in the stock market. The analysis shows which path builds more net worth over time.
Why Use Our Rent vs. Buy Calculator?
- Get a data-driven recommendation — Buy, Rent, or Either
- See year-by-year net worth comparison for both scenarios
- Adjust rent increases, home appreciation, and investment returns
Methodology & Assumptions
How this calculator works, what it assumes, and where it falls short. Every calculator on TruePITI documents its math.
Formula
- Buy side: monthly PITI + maintenance + opportunity cost of down payment; equity grows by principal paydown + appreciation. Rent side: monthly rent + invested down payment and monthly savings at the chosen return. Break-even = year when buy-side net worth crosses rent-side net worth.
Assumptions
- Home appreciation 3%/yr default; rent increase 3%/yr default; investment return 7%/yr default — all adjustable.
- Maintenance estimated at 1% of home value annually.
- Property tax 1.1%, insurance $120/mo, PMI when below 20% down.
- No sale costs modeled at the horizon — add them mentally for moves before year 10.
Limitations
- Local markets vary wildly: 4-5 year break-even is a national average; San Francisco and Dallas differ by years.
- Does not model tax deductions, capital-gains exclusions, or HOA fees.
- Rent control, relocation needs, and lifestyle preferences are not financial inputs — they often dominate the decision.
Worked Example
- $2,000 rent vs $400,000 home at 6.625% with 10% down: buying costs ~$2,900/month all-in, so renting invests ~$900/month more. At 3% appreciation and 7% returns, buy-side net worth crosses rent-side around year 6-7 — but only if you stay long enough to outrun the $25,000+ closing costs.
Sources
- CFPB — Owning a home
- FHFA — House price index (appreciation basis)
Rent vs. Buy FAQ
Is it cheaper to rent or buy a home?
It depends on how long you stay. At 2026 rates (6.625%) with 3% appreciation, buying usually beats renting after 4-7 years in most metros. Rent wins for shorter horizons because closing costs ($15,000-30,000 on a $400,000 home) and higher monthly ownership costs take years to recover through equity.
What is the break-even point for buying vs renting?
The break-even year is when buy-side net worth (equity + appreciation − costs) exceeds rent-side net worth (invested savings + down payment returns). Nationally it averages 4-7 years at current rates; high-price metros with fast appreciation push it earlier, slow-appreciation metros push it later.
How much does a 1% rate change shift the rent-vs-buy decision?
A 1% rate move changes a $400,000 mortgage payment by about $240/month and shifts the national break-even by roughly 1-2 years. At 5.625% the break-even drops to ~4 years; at 7.625% it stretches past 8 in many markets.
What costs do people forget when comparing rent vs buy?
The big five: closing costs (2-5% of price), maintenance (about 1% of home value per year — $4,000 on a $400,000 home), PMI when under 20% down, property tax growth (reassessments), and the opportunity cost of the down payment — $80,000 at 7% returns is $5,600/year you are not earning.
When should I definitely rent instead of buying?
Rent when you expect to move within 3-4 years, when you cannot sustain a major repair bill, when local prices are falling, or when your income is unstable. Buying is rarely the right call for a horizon under 3 years — transaction costs alone typically eat 5-8% of the home value.