Rent vs. Buy Calculator
Compare what renting and buying the same home cost you over the number of years you pick. On the buying side, enter the home price, down payment, mortgage rate and term, property tax, maintenance and the yearly rise in home value. Then enter the closing costs you pay to buy and the costs of selling at the end. On the renting side, enter the monthly rent, how fast it rises and what your savings would earn. The result shows the total cost of each side, the break-even year from which buying stays ahead, the net home equity you build and which option comes out ahead. The break-even year and that verdict both assume you sell at the end of the year, and both count what each side's savings would earn.
Freddie Mac puts closing costs at 2% to 5% of the purchase price (read 30 October 2026). The field starts at 2%.
Freddie Mac puts the agent's commission at 3% to 8% of the sale price and the seller's other closing costs at 2% to 4% (read 30 October 2026). The field starts at 5%, the low ends added together.
Costs at purchase that closing costs leave out, such as moving or first repairs. Starts at 0.
Costs such as home insurance or HOA dues, the same every year. Starts at 0.
How to use the Rent vs. Buy Calculator
- Enter your numbers in the Rent vs. Buy Calculator above.
- Press the Compare button to see the result.
- To try other numbers, change any value and press the button again.
The rent vs. buy comparison
Renting cost = Σ rent × 12, with rent rising each year · · · Buying cost = down payment + closing costs + Σ (mortgage payments + property tax + maintenance) + selling costs · · · Owner each year = home value − selling costs − loan balance + owner's savings · · · Renter each year = renter's savings · · · Buying is ahead when owner > renter · · · Break-even = first year from which buying stays ahead to the end of the comparison
Property tax and maintenance are a percentage of the home's value, and that value grows by your appreciation rate each year. Closing costs are a percentage of the price, paid when you buy. Selling costs are a percentage of the home's value at the end. Both sides start with the same cash, the down payment plus the closing costs. The owner spends it on the home, and the renter invests it at your investment return. Each year, whoever spends less invests the difference at that same return. If owning costs more than rent, the renter invests it. If rent costs more, the owner does. Buying is ahead in a year if selling the home at the end of it, paying off the loan and adding the owner's savings leaves more than the renter has saved. That one test sets the break-even year and decides whether the result recommends buying or renting. Net Home Equity Built is the home's value minus the loan balance and the down payment, before selling costs. Homeowners insurance, HOA fees and tax effects are not part of the comparison.
Worked example
A $400,000 home with 20% down at 6.5% over 30 years, against $2,200 rent rising 3% a year. Home value rises 3% a year, property tax is 1.2%, maintenance 1%, the investment return 7%, closing costs 2% and selling costs 5%. Over 10 years, renting costs $302,646.36. Buying costs $458,474.88, which includes $8,000.00 of closing costs and $26,878.33 to sell the home at the end. Net home equity built is $186,283.31. Renting is ahead for the first 8 years. Buying pulls ahead in year 9 and stays ahead, so the calculator recommends buying. Set closing and selling costs to 0 and buying leads from year 1, which is why leaving them out makes buying look better than it is. Add $5,000 of other buying costs and $2,400 a year of insurance and HOA dues, and buying costs $487,474.88 and is still behind at year 10.
Frequently asked questions
What is the break-even year?
It is the first year from which buying stays ahead to the end of your Years to Compare. Buying is ahead in a year if selling the home at the end of that year, after selling costs and the loan payoff, plus whatever the owner has invested, leaves more than the renter has invested. If buying is behind in the last year, the calculator shows "Beyond comparison period" and recommends renting. Closing and selling costs push the break-even year later, because the home has to earn them back first.
Should I include opportunity cost?
Yes, and the calculator does. Enter a rate under Investment Return if Renting. The renter invests the down payment and the closing costs at that rate, plus the amount by which owning costs more than rent in any year. In a year when rent costs more than owning, the owner invests the difference at the same rate. A higher rate usually pushes the break-even year later, because the renter starts with more invested.
What closing and selling costs does the calculator start with?
Closing costs start at 2% of the price and selling costs at 5% of the home's value when you sell. Freddie Mac's closing costs page, last reviewed on 26 February 2026, says to expect 2% to 5% of the purchase price. Its page on the costs of selling gives 3% to 8% of the sale price for the real estate commission and 2% to 4% for the seller's other closing costs, so 5% is the low end of both added together. We read both pages on 30 October 2026. Your Loan Estimate and your listing agreement have your own figures, and you can type those in instead.
What other buying costs can I add?
Two fields start at 0 because they depend on your home. Other Buying Costs is a one-time amount at purchase that closing costs leave out, such as moving or first repairs. The renter invests the same amount instead, as with closing costs. Other Owning Costs is a yearly amount such as home insurance or HOA dues, and it stays the same every year. Both go into the buying cost, and both can move the break-even year.
Does rent inflation matter?
Yes, more so the longer you compare. The calculator raises the rent by your Annual Rent Increase every year, while the mortgage payment stays the same. At 3% a year, a $2,000 rent is about $2,610 a month by year 10.