Compare renting and buying by modeling owner equity, selling costs, rent growth, monthly cash-flow differences, and invested cash.
When to use this
Use it before monthly payment decides the whole argument
Buying can win through equity and appreciation. Renting can win through flexibility and invested cash. This calculator compares both paths as net worth.
Default result
Buying is ahead by $10,163 after 10 years under these assumptions. Break-even appears at 8 years 10 months.
Result interpretation
What the rent-vs-buy number means
Break-even depends on holding period
Selling costs and closing costs hurt short stays. A longer stay gives principal paydown and appreciation more time to work.
Monthly payment is not the whole cost
Taxes, insurance, HOA, maintenance, opportunity cost, rent growth, and sale costs can outweigh the mortgage payment difference.
Renter cash is not ignored
The model invests the buyer's upfront cash on the renter side, then invests whichever path has lower monthly cash cost.
Worked example: buying breaks even after 8 years and 10 months
The starter example uses a $450,000 home, 20% down, 3% buyer closing costs, and the 6.47% Freddie Mac 30-year PMMS default. Down payment is $90,000, closing costs are $13,500, and the loan is $360,000.
The mortgage payment formula gives $2,268.35 per month. Adding first-month property tax of $412.50, insurance of $150, and maintenance of $375 gives an initial owner cash cost of $3,205.85. The rent side starts at $2,400 rent plus $20 renter insurance.
After 10 years, the model estimates a home value of $604,762, remaining loan balance of $304,964, owner net worth of $263,513 after selling costs, and renter portfolio of $253,350. Buying is ahead by about $10,163, with the first monthly break-even at 106 months.
How to calculate rent vs buy break-even
Calculate the buyer's future net worth after sale, then compare it with the renter's invested portfolio. The break-even month is the first month where the buyer path is at least as high as the renter path.
What costs should I include when buying a home?
Include mortgage principal and interest, property tax, homeowner insurance, HOA dues, maintenance, closing costs, future selling costs, and the expected value of the home at the end of the horizon.
What costs should I include when renting?
Include rent, renter insurance, rent growth, and the return on cash you would not have locked into the home. If renting saves cash each month, that savings is invested in the model.
Why this calculator does not include tax deductions
Tax benefits depend on itemization, income, loan size, state rules, and future law. A simple default could mislead users, so the calculator leaves taxes out unless you adjust another input manually.
How to make a shareable rent-vs-buy result
Use the copy button to share the winning path, advantage, break-even point, and core assumptions. The text includes a Useful Atlas link so someone else can calculate their own market.
These are not national reference numbers. Replace them with lender, local tax, insurance, HOA, and market estimates.
FAQ
What does a rent vs buy break-even mean?
It is the point where the estimated owner net worth after selling the home is greater than or equal to the estimated renter portfolio from investing the down payment, closing costs, and monthly savings.
Does this calculator include tax deductions?
No. It intentionally avoids tax deductions because they depend on income, filing status, itemization, state rules, and loan details. Treat any tax benefit as an extra adjustment outside this estimate.
Why does the renter invest the down payment?
A fair comparison needs to account for opportunity cost. If the buyer locks cash into a down payment and closing costs, the renter could invest that same cash and any monthly savings.
What costs matter most in rent vs buy?
The biggest drivers are mortgage rate, home price, rent, expected holding period, selling costs, appreciation, rent growth, taxes, maintenance, and the return on cash that would be invested while renting.
Should I use the default mortgage rate?
Use it only as a starting scenario. The default is based on the Freddie Mac PMMS average as of June 18, 2026, but your lender quote can differ materially.
Can I share the result?
Yes. The copy button creates a short text result with the winning path, advantage, break-even point, and a Useful Atlas link so someone else can calculate their own version.
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