Rent vs Buy Calculator (USA)
Compare the long-term financial impact of renting versus buying — including home appreciation, rent growth, and investment returns on the down payment.
The renter invests the down payment (and any annual cost savings) at this return rate.
Selling costs fixed at 7% of home value (agent fees + closing costs).
| Year | Home Value | Loan Balance | Buyer Equity | Annual Rent | Renter Portfolio | Buy Advantage |
|---|---|---|---|---|---|---|
| Calculate to see year-by-year comparison | ||||||
How to Use the Rent vs Buy Calculator
In under three minutes you’ll have a complete year-by-year comparison of buying versus renting — including the exact break-even year, final net worth for each scenario, and a downloadable PDF report.
Enter Property & Financing Details
Input the home price you’re considering, your down payment (dollar amount or percentage), mortgage rate, and loan term. The down payment badge shows your LTV percentage in real time. Use the slider to test different down payment scenarios quickly.
Set Rental & Investment Assumptions
Enter the monthly rent you’d pay for a comparable rental, the annual rent growth rate (how fast rent increases each year), and the investment return rate — the annual return the renter earns by investing their down payment and any monthly savings from renting.
Set Market Conditions
Enter your home appreciation assumption, analysis period (5–30 years), annual property tax rate, and a combined maintenance and insurance rate as a percentage of home value. These inputs directly determine the homeownership cost side of the comparison.
Review Break-Even & Download PDF
The results show the break-even year, final net worth for both scenarios, a net worth comparison chart, and a full year-by-year table with buyer equity, renter portfolio, and the annual advantage highlighted in blue when buying is ahead. Download the 2-page PDF to share with a partner, advisor, or lender.
What This Calculator Shows You
Most rent vs buy tools give you a single monthly payment comparison. This one models your full financial trajectory over your entire analysis period, accounting for appreciation, rent growth, mortgage paydown, selling costs, and invested savings simultaneously.
Break-Even Year
The exact year when the buyer’s net worth (home equity after selling costs) first exceeds the renter’s net worth (invested portfolio). This is the core output of the analysis — if you plan to stay longer than the break-even, buying is likely the better financial choice.
Net Worth Comparison Chart
A year-by-year line chart tracking buyer net worth (blue) and renter net worth (orange) simultaneously. The chart makes it visually clear exactly when the lines cross — and how the advantage grows or shrinks over time based on your appreciation and investment assumptions.
Final Net Worth for Both Scenarios
At the end of your analysis period, the calculator shows the exact net worth for the buyer (home value minus remaining loan balance minus 7% selling costs) and renter (invested portfolio), plus the dollar advantage of the winning scenario.
Year-by-Year Comparison Table
A full accordion table showing home value, loan balance, buyer equity, annual rent, renter portfolio, and buy advantage for every year of the analysis period. Blue-highlighted rows indicate years when buying is ahead — making the break-even point immediately visible in the data.
Cost Summary
Side-by-side totals showing cumulative rent paid over the analysis period versus total homeownership costs (mortgage + tax + maintenance), plus the final home value — so you can see exactly how much of the buyer’s total costs are recouped through equity and appreciation.
2-Page PDF Report
Page 1 covers assumptions, net worth comparison with proportion bars, break-even summary, and 6 key metric cards. Page 2 is the full year-by-year table with buy-ahead rows highlighted in blue. Download and share with a financial advisor, mortgage broker, or co-decision-maker.
The Rent vs Buy Decision in Numbers
Three Decision-Makers Who Need This Calculator
The rent vs buy decision looks different depending on your market, timeline, and financial priorities. These three profiles show how to use the calculator for the most common scenarios — and what to pay attention to in each case.
You can afford to buy — you have the down payment, you qualify for the mortgage — but you’re not sure whether buying now is actually the better financial move compared to staying in your rental. You’ve been told “buying is always better” but your rent is relatively affordable, and you’re not certain you’ll stay in the area for more than 4–5 years. This calculator gives you the exact break-even year and final net worth comparison so you can make a data-driven decision instead of relying on conventional wisdom.
- The break-even year is your anchor — if you’re confident you’ll stay longer than that, buying is likely the better financial choice
- Run the calculator with a conservative appreciation assumption (2–3%) and a realistic investment return (6–7%) to get a balanced picture
- The year-by-year table shows exactly how the advantage builds — look at year 5, 7, and 10 to calibrate your risk tolerance
You’ve made a conscious choice to rent and invest rather than buy. You believe the stock market will outperform real estate, your rent is well below the cost of ownership in your market, and you value the flexibility of renting. You want to validate your strategy with real numbers — not just gut feel — and understand exactly what investment return you need to stay ahead of the buyer scenario long-term.
- Test different investment return rates (5%, 7%, 9%) and appreciation rates (2%, 4%, 6%) to understand which scenarios favour your strategy
- Pay close attention to the rent growth input — at 3–4% annual growth, rents compound significantly and the renter advantage shrinks over time
- The “never break-even” result is valid if your investment return is high and appreciation is modest — confirm how high the investment return needs to be
You’re moving to a new city for work. You could buy now, but you’re not sure if you’ll stay for 3 years or 8. Buying and selling quickly can be financially damaging due to the 7% selling cost and limited equity buildup in early years. You need to understand what happens to your net worth if you buy and sell at year 3, 5, or 7 — versus renting the whole time — so you can make the right call given the uncertainty.
- Run the calculator three times with analysis periods of 3, 5, and 7 years — the break-even result will change dramatically between scenarios
- In a high-appreciation market, even a 3-year buy-and-sell can break even — run local appreciation data rather than the 3% national default
- If the break-even is beyond 7 years, strong appreciation is likely required to justify buying with an uncertain hold period
7 Things to Know Before Running the Numbers
The rent vs buy calculator is only as good as its inputs. These seven tips will help you set realistic assumptions, interpret the results correctly, and avoid the most common mistakes people make when comparing the two options.
The Break-Even Year Is More Important Than the Monthly Payment Comparison
Most people compare the monthly mortgage payment to rent and stop there. That’s incomplete. A mortgage may cost more per month than rent today, but after year 7 or 10, the buyer has built substantial equity while the renter’s rent has escalated. The break-even year tells you the minimum time horizon that makes buying worthwhile — comparing monthly payments alone can be deeply misleading.
Use Local Appreciation Data, Not the National Average
The national average home appreciation of 3–4% masks enormous regional variation. In high-demand coastal markets, appreciation has averaged 5–7% over decades. In many Midwest and rural markets, 1–2% is more realistic. Enter the appreciation rate for your specific metro — not the national default — or run the calculator at 2%, 4%, and 6% to see how sensitive the break-even is to appreciation assumptions in your market.
Rent Growth Is the Most Underestimated Variable in the Analysis
Many renters think about today’s rent, not tomorrow’s. At 3% annual rent growth, a $2,200/month rent becomes $2,930 in 10 years and $3,900 in 20. The compounding effect of rent growth is one of the strongest long-term arguments for homeownership — the mortgage payment is fixed, but rent keeps rising. Test what happens to the break-even when you increase rent growth from 2% to 4% — the difference is often 3–5 years.
Be Honest About What the Renter Actually Invests
This calculator assumes the renter invests the down payment from day one, plus any annual savings when owning costs exceed rent. In practice, many renters spend the cost difference rather than investing it. If you run the numbers with a 7% investment return but know you won’t actually invest consistently, reduce the investment return assumption to model your real financial behaviour — otherwise the renter scenario will be misleadingly optimistic.
The 7% Selling Cost Is a Hard Reality — Plan Around It
The calculator applies a fixed 7% selling cost (agent commissions + buyer closing contributions + transfer taxes) to the final home value when computing the buyer’s net worth. This is not pessimistic — it reflects actual transaction costs in most U.S. markets. On a $600,000 home, that’s $42,000 off your net worth at the time of sale. This is why the buyer’s net worth in early years can be negative — the selling cost must be overcome before buying starts to pay off.
Adjust the Analysis Period to Match Your Real Horizon
The default analysis period is 30 years, but most people don’t stay in a home that long. Set the period to your realistic hold period — 5, 7, or 10 years — and look at the results for that specific timeframe. A 30-year analysis almost always favours buying because of compound appreciation; a 5-year analysis often favours renting if the break-even is year 6 or later. The analysis period is probably the most important input to get right.
Download the PDF and Review the Year-by-Year Table Before Deciding
The 2-page PDF includes the full year-by-year comparison table with blue-highlighted rows showing every year when buying is ahead. Review this table carefully — look at the magnitude of the advantage, not just the existence of it. A $5,000 buy advantage in year 10 is very different from a $100,000 advantage. The table also shows how your home equity builds year by year, which is valuable for understanding your future financial flexibility as a homeowner.
Frequently Asked Questions
Everything you need to know about how this calculator models the rent vs buy decision, how to interpret the break-even analysis, and what factors it does and doesn’t account for.
For informational purposes only. All calculations use simplified models and do not constitute financial, legal, or real estate advice. Actual outcomes depend on many factors not captured in this tool, including local market conditions, transaction costs, tax treatment, financing terms, property management, and individual financial behaviour. Home values and investment returns are not guaranteed and can decline as well as increase. This calculator does not account for PMI, HOA dues, mortgage interest tax deductions, capital gains taxes on investment returns, or lease break fees. Consult a licensed financial advisor, mortgage professional, and real estate agent before making any home purchase or investment decision.