Home Buyer Tool

Rent vs. Buy Calculator

Name: Domestic Real Estate
Address: US
Price range: $$$

Find the year buying overtakes renting — with equity, appreciation, maintenance and the return you'd give up on your down payment all counted.

Home Price$400,000

Monthly Rent$2,200

Down Payment20% ($80,000)

Interest Rate6.50%

Years You'll Stay7 years

Assumptions you can change

Home appreciation / year3%

Rent increase / year3%

Investment return / year5%

What your down payment would earn if you invested it instead of buying.

Break-even point

Year 9

Stay longer than 9 years and buying costs less than renting.

After 7 years

Total cost of renting$202,289

Net cost of buying$211,490

Home equity built$202,618

Renting saves you$9,201

Monthly principal & interest: $2,023 · Cash needed up front: $92,000 (down payment plus 3% closing costs)

Year	Rent	Buy	Equity
1	$26,400	$61,139	$95,577
2	$53,592	$86,263	$111,753
3	$81,600	$111,369	$128,556
4	$110,448	$136,450	$146,013
5	$140,161	$161,502	$164,155
6	$170,766	$186,517	$183,012
7	$202,289	$211,490	$202,618
8	$234,758	$236,411	$223,007
9	$268,200	$261,274	$244,216
10	$302,646	$286,068	$266,283

Estimates only. Assumes a 30-year fixed loan, property tax at 1.2% and insurance at 0.5% of home value per year, maintenance at 1%, 3% closing costs and 6% selling costs. It does not model mortgage insurance or your tax situation — confirm those with a lender and a tax professional.

Rent vs. buy questions

What is the break-even point in rent vs. buy?: The break-even point is the year at which the total cost of owning drops below the total cost of renting the same home. Before that year, renting is cheaper; after it, buying is. It exists because buying front-loads its costs — closing costs and the down payment are paid on day one, while the benefits accumulate slowly through equity and appreciation.
Why does this calculator include a return on the down payment?: Because the money used for a down payment could have stayed invested. Ignoring that makes buying look better than it is. This calculator charges renting the rent, and charges buying the return the down payment and closing costs would have earned elsewhere — that is what economists call opportunity cost.
What maintenance cost should I assume?: A common planning figure is 1% of the home value per year, which is the default here. Older homes, larger lots and homes with pools run higher. Condos often run lower on maintenance but carry HOA dues instead, so enter those separately.
Does this replace advice from a lender or accountant?: No. This is an estimate built from the numbers you enter. It does not model your tax situation, mortgage insurance, or local closing customs. Use it to frame the decision, then confirm the details with a lender and a tax professional.

Mortgage calculator Affordability calculator Closing cost calculator

Numbers Say Buy?

Start with what you can actually borrow, then look at homes in that range.

Get Pre-Approved Browse Properties

Year

Rent

Buy

Equity

$26,400

$61,139

$95,577

$53,592

$86,263

$111,753

$81,600

$111,369

$128,556

$110,448

$136,450

$146,013

$140,161

$161,502

$164,155

$170,766

$186,517

$183,012

$202,289

$211,490

$202,618

$234,758

$236,411

$223,007

$268,200

$261,274

$244,216

$302,646

$286,068

$266,283

Rent vs. buy questions

What is the break-even point in rent vs. buy?

The break-even point is the year at which the total cost of owning drops below the total cost of renting the same home. Before that year, renting is cheaper; after it, buying is. It exists because buying front-loads its costs — closing costs and the down payment are paid on day one, while the benefits accumulate slowly through equity and appreciation.

Why does this calculator include a return on the down payment?

Because the money used for a down payment could have stayed invested. Ignoring that makes buying look better than it is. This calculator charges renting the rent, and charges buying the return the down payment and closing costs would have earned elsewhere — that is what economists call opportunity cost.

What maintenance cost should I assume?

A common planning figure is 1% of the home value per year, which is the default here. Older homes, larger lots and homes with pools run higher. Condos often run lower on maintenance but carry HOA dues instead, so enter those separately.

Does this replace advice from a lender or accountant?

No. This is an estimate built from the numbers you enter. It does not model your tax situation, mortgage insurance, or local closing customs. Use it to frame the decision, then confirm the details with a lender and a tax professional.