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Rent vs Buy Calculator

Should you rent or buy? Compare what you would have after the years you plan to stay, with every cost of owning counted and every assumption on show.

Enter a home price, mortgage rate and rent to compare renting with buying.

Buying

Renting

For a home comparable to the one you would buy.

A year.

How long

Owning costs

Each one is an assumption you can change.

Of the home’s value, a year.

A year, at today’s price.

Of the home’s value, a year.

A month.

Of the loan, a year, while under 20% equity.

Of the price, paid when buying.

Of the sale price: agent fees and closing.

Growth

Planning assumptions, not forecasts.

A year.

A year, on money not spent on the house.

Projection. Depends on the future. Useful for planning, never a promise.

How this calculator works

Comparing a mortgage payment with rent is the wrong comparison. Owning also costs property tax, insurance, maintenance, closing costs and, when you sell, agent fees. Renting keeps your down payment free to invest. A fair comparison counts all of it.

So the calculator starts both paths with the same cash: the down payment plus closing costs. The buyer spends it on the house. The renter invests it. Each month it adds up the full cost of owning and the rent, and whichever is cheaper that month invests the difference, so neither side is credited with money it would really have spent.

At the end, the buyer sells: the home’s value, less selling costs and the mortgage still owed, plus anything they invested. The renter has their investments. Whichever is larger is ahead. It does the same sum for every year, which shows the break-even year, the first year at which selling would leave the buyer ahead.

Every number it uses is an input you can change, including the ones nobody can know in advance: how fast home prices and rents rise, and what invested money earns. Try a few. If the answer flips with a small change, the decision is closer than either side claims.

The formula

Exactly what happens to your numbers, step by step.

  1. Owning, each month

    principal and interest + property tax
+ insurance + maintenance + HOA + PMI

  2. Renting, each month

    rent, rising once a year

  3. What you would have

    buy:  value × (1 − selling costs)
      − mortgage left + investments
rent: down payment and closing costs
      invested + monthly savings invested

A worked example

A $400,000 home with 20% down at 6.5% for 30 years, against renting a similar place for $2,200 a month, staying 7 years. Other inputs at their defaults.

What you enter

Home price
$400,000
Down payment
20%
Mortgage rate
6.5%, 30 years
Rent
$2,200 a month
Years
7

Step by step

Cash needed to buy
$80,000 down + $12,000 closing = $92,000
First month owning
$2,872.62, against $2,200 renting
Buying, after 7 years
$173,101 after selling
Renting, after 7 years
$185,999 invested

Renting comes out $12,898 ahead after 7 years

Buying would break even in year 10. Over 7 years the costs that come with buying and selling, about $12,000 to buy and 6% of the sale price to sell, are not yet earned back. Stay longer, or find a lower rate or price, and the answer changes.

Assumptions

Every result here rests on these. Change your inputs and the result changes with them.

  • Both paths start with the same cash, and whichever is cheaper each month invests the difference at the investment return.
  • Property tax, insurance and maintenance rise with the home’s value. HOA dues stay as entered.
  • PMI applies with less than 20% down and stops when scheduled payments bring the balance to 80% of the price, the point at which you can ask for it to be removed.
  • Rent rises once a year. Renter’s insurance and utilities are left out of both sides.
  • Defaults are planning assumptions, not forecasts: 3% home price growth, 3% rent increases, a 5% investment return, 1% maintenance, 3% closing costs (inside the CFPB’s typical 2–5%) and 6% selling costs.

What this cannot tell you

  • Income tax is not modeled: not the mortgage interest deduction (most households take the standard deduction), not tax on investment returns, and not capital gains on the home, which is mostly excluded up to $250,000, or $500,000 for a married couple.
  • It assumes a fixed-rate mortgage held to the sale, no refinancing, and no moving costs.
  • Nobody knows future home prices, rents or investment returns. Small changes to them move the answer a lot, which is a reason to try several.
  • It compares money only. Stability, control over your home and the freedom to move are real and are yours to weigh.

Questions people ask

Is it better to rent or buy a house?

It depends most on how long you stay. Buying carries large one-time costs, about 2–5% of the price to buy and several percent more to sell, so it usually takes years of rising equity to earn them back. Over a short stay renting often wins; over a long one, buying often does. Enter your own numbers to see where your break-even year falls.

What is the break-even point for buying a house?

The first year at which buying and then selling would leave you with more than renting and investing the difference. Before it, renting is ahead; after it, buying is. In the example above it is year 10.

Why does the down payment count against buying?

Because money in the house is money not invested elsewhere. The renter is assumed to invest the same cash the buyer puts down, and it grows at the investment return you enter. Leaving that out makes buying look better than it is.

What costs of owning do people forget?

Maintenance, often estimated at around 1% of the home’s value a year; property tax and insurance, which rise over time; closing costs when you buy; and selling costs when you leave, which are commonly several percent of the price. The calculator includes all of them.

Related calculators

Sources and review

Sources

Methodology version 1.0.0 · Last reviewed

Cite this calculator

For coursework, a resource list or your own site. How every calculator is built and checked is set out on the methodology page.

Citation

Chalk Calculator. (2026, October 12). Rent vs Buy Calculator (Methodology version 1.0.0). https://chalkcalculator.com/rent-vs-buy-calculator/

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