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Rent vs. Buy Calculator

Buying

Freddie Mac's 30-year average for Oct 1, 2026. Enter the rate you're quoted.

Renting

Your plans and the market

Buying pays offIn year 17
Net cost of buying, 10 years$303,470
Down payment and closing costs$80,500
Mortgage payments$229,895
Property tax, insurance, upkeep$105,468
What that money could have earned$87,922
Back when you sell, after selling costs and the loan−⁠$200,315
Net cost of renting, 10 years$277,197
Rent and renters insurance$277,197
First month, owning$2,682.46
First month, renting$2,015.00

How far ahead buying is, by the year you move

Below $0, renting is ahead.

−$40k−$20k$0$20kYear 1Year 10Year 19Pays off: year 17You move: year 10

What moves the answer most

Each one point higher a year, over your 10 years:

  • Home price growth$38,846 toward buying
  • Mortgage rate$36,807 toward renting
  • Investment return$19,161 toward renting

Assumes: Property tax 1.2% and upkeep 1% of the home's value a year; home insurance $1,500 a year, rising with home values; closing costs 3% of the price, selling costs 6% of the sale price; renters insurance $15 a month, rising with rent.

Both paths spend the same: the renter invests the down payment and closing costs, and whichever home costs less each month invests the difference, at your investment return. Taxes are left out: the mortgage interest deduction, tax on investment gains and any tax on the home sale.

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Estimates for informational purposes only — not financial advice.

Compare scenarios

Pin the numbers on screen, change any input, and see them side by side.

Renting or Buying: Which Costs Less?

Buying a home and renting one cost money in different ways. Buyers pay closing costs, a mortgage, property tax, insurance and upkeep, and get the home's value back, less selling costs, when they move. Renters pay rent, but keep their down payment free to invest. This calculator counts all of it over the years you plan to stay, shows the year buying starts to cost less, and lists the assumptions that move the answer most.

How this calculator works

Compares the full cost of buying a home and selling it when you move with renting a similar home for the same years, counting what the money could have earned if invested.

How it calculates

  1. Buying: the down payment and closing costs up front; then each month the mortgage payment (fixed rate, at the yearly rate ÷ 12), property tax and upkeep as a share of the home's value, insurance, HOA dues, and with less than 20% down, PMI on the original loan until the schedule reaches 78% of the price or the loan's midpoint.
  2. Renting: rent plus renters insurance each month.
  3. Once a year the home's value rises by the home price growth, and property tax, upkeep, insurance and HOA dues with it; rent and renters insurance rise by the rent increase.
  4. Both paths spend the same: the renter invests the down payment and closing costs, and whichever path costs less in a month invests the difference, at the investment return, compounded monthly.
  5. When you move, the home sells at its grown value, less selling costs and the remaining loan balance.
  6. Net cost of buying = everything paid to buy and own + what that money could have earned − what the sale brings back. Net cost of renting = rent and renters insurance + what any extra rent could have earned. The difference is how much more one path leaves you with.
  7. The break-even year is the first year in which buying's net cost is lower, checked for every year up to 50.
  8. The main drivers raise each yearly rate (home price growth, investment return, mortgage rate and rent increase) by one percentage point, one at a time, and show how far each moves the result.

What it assumes

  • Taxes are left out: the mortgage interest deduction, tax on investment gains and tax on the home sale.
  • Monthly costs are counted at the start of each month.
  • Growth rates stay the same every year, and the mortgage rate is fixed.
  • You sell the home when you move.
  • The default mortgage rate is Freddie Mac's latest weekly 30-year average. The other defaults are examples, not forecasts; closing costs default to 3%, within the 2% to 5% range the CFPB gives.

Sources

Copy and figures last reviewed .

How we build and check all our calculators

Frequently Asked Questions

How does the calculator decide whether renting or buying is cheaper?

It gives both paths the same money. The renter invests the down payment and closing costs the buyer spends, and each month whichever home costs less invests the difference. When you move, the buyer sells the home and pays off the loan. Each path's net cost is what it paid out, plus what that money could have earned, minus what the sale brings back; the cheaper path leaves you with more.

Why can buying take years to pay off?

Buying has one-time costs that renting doesn't: closing costs when you buy and selling costs when you sell. In the early years of a long mortgage much of each payment is interest rather than equity, and property tax, insurance and upkeep come on top. The longer you stay, the more years share the one-time costs and the more equity and home value you build, which is why the break-even year matters.

What does "what that money could have earned" mean?

Money tied up in a home can't be invested elsewhere. The calculator counts what the down payment and closing costs, and any month's extra cost of owning, would have earned at your investment return. When renting costs more than owning, the renter bears that cost instead. Leaving it out would make buying look cheaper than it is.

Does the calculator include the mortgage interest tax deduction?

No. Whether the deduction helps you depends on whether you itemize, your tax bracket and your state, so the calculator leaves taxes out: no mortgage interest deduction, no tax on investment gains and no tax on the home sale. If you itemize, owning costs somewhat less than shown; if your investments would be taxed, renting gains less than shown.

What should I enter for home price growth and investment return?

No one knows either one, so try more than one value. The defaults are starting points, not forecasts. The results list the assumptions that move the answer most, with how much each point changes it, so you can see which guesses matter for your situation and test a cautious and a hopeful version of each.

Term Definitions

Purchase Price

This is the agreed-upon price of the property between the buyer and the seller. It is the starting point for most mortgage calculations, as the loan amount is typically the purchase price minus the down payment.

Down Payment

A down payment is the amount of money you pay upfront when purchasing a home, and it is not part of the loan. It can be expressed as a fixed dollar amount or a percentage of the purchase price. A larger down payment can result in a lower interest rate and monthly payment, and may help you avoid private mortgage insurance (PMI).

Interest Rate

The interest rate is the percentage of the principal that a lender charges for borrowing money. It is typically expressed as an annual rate. A lower interest rate will result in lower monthly payments and less total interest paid over the life of the loan.

Loan Term (Years)

The loan term is the duration over which the loan is scheduled to be repaid. Common loan terms are 15 or 30 years for mortgages, or 3-7 years for personal or auto loans. A longer term usually means lower monthly payments but more total interest paid.

Monthly Rent

Enter the monthly rent for a home comparable to the one you are thinking of buying: same area, size and condition. Comparing a small apartment with a large house tells you little about whether to rent or buy.

Rent Increase

Rent usually changes when a lease renews. The calculator raises rent once a year by this percentage, and renters insurance with it. A mortgage payment, by contrast, stays the same for the life of a fixed-rate loan, which is one reason buying tends to look better the longer you stay.

Years You'll Stay

Buying has large one-time costs: closing costs when you buy and selling costs when you leave. The longer you stay, the more years share those costs, so staying longer favors buying. The calculator assumes you sell the home when you move.

Home Price Growth

Home values move with the local market and are hard to predict. The calculator raises the value once a year by this percentage, and property tax, upkeep, insurance and HOA dues rise with it. Try a few values; the results list the inputs that move the answer most.

Investment Return

Money you don't put into a home can be invested instead. This is the yearly return assumed for it on both paths: the renter's invested down payment and any monthly savings, and the owner's savings in any month owning costs less than renting. It is before taxes.

Property Tax

Local governments tax homes based on their assessed value. Enter your area's rate as a percentage of the home's value; the calculator applies it to the value each year. A recent tax bill or the listing for a similar home will show what homes nearby pay.

Upkeep

Owners pay for the repairs and upkeep a landlord covers for renters: a new roof, a water heater, painting and the like. Costs vary widely with a home's age and condition. Enter what you expect each year as a percentage of the home's value.

Annual Home Insurance

Homeowners insurance is a policy that protects your property against damages from events like fire, theft, or storms. Lenders require this insurance to protect their investment. The cost is typically paid annually or escrowed into your monthly mortgage payment.

Monthly HOA Fees

Homeowners association (HOA) fees are monthly dues paid by homeowners in a condominium or planned community. These fees cover the maintenance of common areas and other shared amenities.

Closing Costs

Closing costs are fees associated with completing a real estate transaction. They typically range from 2% to 5% of the home's purchase price and can include appraisal fees, title insurance, attorney fees, and more. These costs are paid at closing, when the title of the property is transferred to the buyer.

Selling Costs

Selling a home costs money: agent commissions, transfer taxes and other closing costs. They vary by place and by what you negotiate. The calculator takes this share of the sale price when you move.

PMI Rate (%)

Private mortgage insurance (PMI) protects the lender when you borrow more than 80% of the home's value. It typically costs 0.3% to 1.5% of the loan amount per year, charged monthly, with better credit earning lower rates. PMI ends automatically when your original payment schedule reaches 78% of the home's original value. Extra payments don't move that date, but they bring forward the point where your balance reaches 80%, when you can ask your lender to cancel it.

Renters Insurance

Renters insurance covers your belongings and your liability; the landlord insures the building. Enter your monthly premium, or 0 if you don't carry it.

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