Weigh a monthly rent against the true monthly cost of owning, payment, taxes, insurance and upkeep.
How this is calculated Embed on your siteUpdated October 2026
Comparing rent with a mortgage payment answers the wrong question. Buying costs more than the mortgage, and it also builds equity and ties up cash that a renter could invest. This calculator compares the two the way that matters: how much each household is worth after the number of years you plan to stay.
With the default inputs, a $420,000 home with 20% down at 6.5% costs about $3,034 a month to own in year one, counting the mortgage, property tax, insurance and maintenance. Rent is $2,200. After seven years, the renter who invested the down payment and the monthly difference is about $39,800 ahead. Buying does not catch up until year 23.
Both households start with the same money. The buyer spends it on the down payment and closing costs. The renter invests it. Every month after that, whoever has the lower housing bill invests the difference. At the end:
The year in which the owner's net worth passes the renter's is the break-even point. If you expect to move before then, renting is likely the better financial choice.
Five inputs do most of the work. Here is how each one moves the default example, holding everything else steady:
| Change | After 7 years | Break-even |
|---|---|---|
| Defaults (3% appreciation, $2,200 rent, 6.5% rate) | Renting ahead by $39,772 | Year 23 |
| Rent of $2,600 instead of $2,200 | Buying ahead by $5,221 | Year 7 |
| Home appreciation of 4% | Renting ahead by $9,315 | Year 9 |
| Home appreciation of 5% | Buying ahead by $23,034 | Year 5 |
| Mortgage rate of 5.5% | Renting ahead by $12,048 | Year 10 |
| Mortgage rate of 7.5% | Renting ahead by $67,879 | Not within 30 years |
| Home appreciation of 2% | Renting ahead by $68,427 | Not within 30 years |
The pattern is clear. Buying wins when rent is high relative to the price of a comparable home, when prices are rising, and when mortgage rates are low. It loses when rates are high and rents are cheap compared with prices, which describes many expensive metro areas.
Divide the home price by a year of rent for a similar place. In the default example, $420,000 ÷ $26,400 is about 16. As a rough guide, ratios under 15 tend to favor buying, and ratios above 20 tend to favor renting, especially when mortgage rates are high. It is only a starting point, but it explains why the same calculator gives different answers in different cities.
Buying and selling a home is expensive. Closing costs of around 3% when you buy and around 6% when you sell, mostly agent commissions, mean an owner starts in a hole of roughly 9% of the price. Equity and appreciation have to fill that hole before buying pulls ahead. That is why short stays almost always favor renting, and why the number of years you plan to stay is the most important input after rent and price.
There are also non-financial reasons to buy or rent: stability for kids, freedom to renovate, flexibility to move for work. The math is one input, not the whole decision.
Before you buy, check what price your income supports with the home affordability calculator, and see the full payment with the mortgage calculator.
It depends on how long you stay, the ratio of home prices to rents, mortgage rates and appreciation. In the default example, renting is ahead for 22 years, but with rent of $2,600 instead of $2,200, buying pulls ahead in year 7.
Often at least five to seven years, because buying and selling costs add up to roughly 9% of the price. The calculator shows your break-even year for your own numbers.
Divide the home price by a year of rent. Under about 15 tends to favor buying, and over about 20 tends to favor renting, though rates and appreciation matter too.
No. Renters pay for housing, and owners pay interest, property tax, insurance and maintenance, none of which build equity. The real comparison is net worth after you account for what each choice lets you invest.
Use what you would realistically earn on the money. A long-run stock and bond mix might return 5% to 7% a year before inflation. A higher return favors renting.
The calculator simulates both paths month by month. Assumptions and formula are on our methodology page. Educational estimate, not financial advice.