Find your break-even point — renting vs buying made clear
Finance
Compare the true net cost of renting vs buying a home over your time horizon — including equity, investment returns, and all hidden costs.
If mortgage > rent, renters invest the monthly difference — this is added to their portfolio.
Deciding whether to rent or buy a home is one of the most significant financial decisions you'll make. This rent vs buy calculator goes beyond a simple mortgage payment comparison — it factors in down payment opportunity cost, property taxes, maintenance, home appreciation, rent increases, and what your down payment could earn if invested instead, giving you the true net cost of each path over your chosen time horizon.
Net cost is total money spent minus the value you get back. For buyers, that means all payments and fees minus home equity after selling costs. For renters, it's all rent paid minus the investment portfolio built from the down payment alternative. Lower net cost means you came out ahead financially.
Buying has large upfront costs (down payment, closing costs) that a renter can invest instead. If investment returns outpace home appreciation — or if you sell before enough equity builds — renting can be the cheaper option. The break-even year shows exactly when buying tips in your favor.
The break-even year is the first year in which the buyer's net cost drops below the renter's net cost. Before that year, renting is cheaper on a net basis; after it, buying is. Staying in the home beyond the break-even year makes buying increasingly advantageous.
A common benchmark is 7% annually, reflecting the long-run average real return of a diversified stock index fund. If you would keep the money in a savings account, use a lower rate (3-5%). The higher the investment return, the stronger the case for renting tends to be.