Rent vs. Buy Calculator
Compare the full cost of renting versus buying over a 30-year horizon. See cumulative rent, cumulative ownership cost, home equity, the opportunity cost of your down payment, and the year the two paths cross — on your numbers, with every assumption shown.
Rental Information
Returns if you invested the down payment instead of buying
Purchase Information
% of home value per year
Break-even year
The first year owning costs less than renting once equity is counted. This is data, not advice — your horizon and lifestyle decide.
Full-horizon comparison
| Horizon | Cumulative rent | Cumulative ownership | Home equity | Opportunity cost | Owner net | Renter net |
|---|---|---|---|---|---|---|
| 1 yr | $30k | $146k | $119k | $107k | $27k | -$77k |
| 3 yr | $93k | $237k | $159k | $123k | $79k | -$30k |
| 5 yr | $159k | $329k | $202k | $140k | $127k | $19k |
| 10 yr | $344k | $558k | $326k | $197k | $232k | $147k |
| 20 yr | $806k | $1015k | $670k | $387k | $346k | $419k |
| 30 yr | $1427k | $1473k | $1214k | $761k | $260k | $666k |
Owner net = cumulative ownership cost − home equity. Renter net = cumulative rent − opportunity cost, defined as the down payment invested at your chosen return (a conservative model — it does not credit the renter for any monthly cash difference). Lower net cost does not by itself make one path “right” — it is one input.
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 chosen horizon. 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 credits the renter with the opportunity cost of the down payment invested at the return you choose. The comparison shows cumulative rent, cumulative ownership cost, home equity and opportunity cost at 1, 3, 5, 10, 20 and 30 years.
Why Use Our Rent vs. Buy Calculator?
- Full-horizon rows — see how the picture changes at 1, 5, 10 and 30 years
- Every assumption is adjustable and shown — no black box
- Transparent data, not a verdict: you decide, with the numbers in front of you
Methodology & Assumptions
How this calculator works, what it assumes, and where it falls short. Every calculator on TruePITI documents its math.
Formula
- Buy side: down payment + monthly PITI + maintenance + HOA accumulated over the horizon; equity = appreciated home value − remaining loan balance. Rent side: rent grown annually, minus the opportunity cost of the down payment invested at the chosen return. Break-even = first year owner net cost < renter net cost.
Assumptions
- Home appreciation 3%/yr, rent increase 3%/yr and investment return 7%/yr are adjustable defaults.
- Maintenance is estimated at 1% of home value per year; HOA defaults to $0.
- Property tax and insurance are held constant and do not amortize.
- Down payment is 20% by default; under 20% adds mortgage insurance in a full PITI model.
Limitations
- Local markets vary: a national-average break-even hides metro-level differences of several years.
- Does not model tax deductions, capital-gains exclusions, or sale/transaction costs at the horizon.
- Rent control, relocation plans and lifestyle preferences are not financial inputs — but often decide the real answer.
Sources
- CFPB — Owning a home
- FHFA — House Price Index (appreciation basis)
- Freddie Mac PMMS (rate anchor)
Rent vs. Buy FAQ
Is it cheaper to rent or buy a home?
It depends on how long you stay. At current rates with 3% appreciation, buying often beats renting after 4-7 years in many metros. Rent can win for shorter horizons because closing costs 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 owner net cost (ownership cost minus equity) drops below renter net cost (rent minus the value of investing the down payment and any surplus). 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 roughly $240/month and can shift the break-even by about 1-2 years, depending on the market.
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), mortgage insurance when under 20% down, property-tax growth after reassessment, and the opportunity cost of the down payment.
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. Transaction costs alone can eat several percent of the home value.
Rate assumption: 7.32% (default is the Freddie Mac PMMS national 30-year average, 2026-10-22). Calculated: 2026-11-01. Estimates only.