Rent vs Buy Calculator

About the Rent vs Buy Calculator

The rent vs. buy debate is one of the most consequential financial decisions most people face. Conventional wisdom says buying is always better long-term, but this ignores transaction costs, opportunity cost, local market conditions, and your personal timeline. Our rent vs. buy calculator accounts for all of these factors to give you a true comparison — not a simplified one that always favors buying.

How It Works

The calculator models total costs of each option over your expected time in the home. Buying costs include mortgage payments, property taxes, insurance, HOA, maintenance (estimated at 1–2% of home value annually), closing costs (2–5% when buying, 6–10% when selling), and compares against the opportunity cost of the down payment invested in the market. Renting costs are monthly rent plus renter's insurance, offset by investment returns on the down payment capital not spent.

Tips & Best Practices

• ✓The break-even point where buying wins is typically 5–7 years in most US markets.
• ✓In high-cost cities like San Francisco or London, renting may be more cost-effective for 10+ years.
• ✓Home appreciation varies enormously: some metros average 5%/year, others 0–1%.
• ✓The price-to-rent ratio below 15 generally favors buying; above 20 generally favors renting.
• ✓Transaction costs alone mean you need 3–4% home appreciation just to break even in year 1.

Who Uses This Calculator

Young professionals deciding whether to settle in a city or stay mobile, families choosing between rental flexibility and homeownership stability, and real estate investors evaluating markets use this analysis. The answer is genuinely different for different people, timelines, and locations.