Rent vs Buy Calculator

What this rent vs buy calculator compares

Setting a mortgage payment beside a rent check gets the question wrong: part of the mortgage payment builds equity, and a renter’s unspent down payment stays invested and keeps growing. This calculator compares what matters — how much each household would be worth after the years you plan to stay.

The model

The calculator runs month by month for 30 years and reports year-end figures:

• Buying net worth = home value − selling costs − remaining loan balance + the buyer’s investments.
• Renting net worth = the renter’s investments, which start with the down payment and closing costs the buyer spends on day one.
• Each month, owning costs (mortgage payment, property tax, insurance, maintenance and HOA dues) are compared with renting costs (rent plus renter’s insurance). Whichever side pays less invests the difference — the renter when renting is cheaper, the buyer when owning is — so both spend the same on housing plus saving.
• Both accounts earn the same return, compounded monthly, with savings added at month end.
• Home value grows at the appreciation rate. Property tax and maintenance are percentages of the value at the start of each year, insurance and HOA dues rise at the appreciation rate, and rent and renter’s insurance rise yearly at the rent-increase rate. After payoff, owning costs drop to tax, insurance, maintenance and HOA dues.

The break-even year is the first year-end from which buying’s net worth stays at or above renting’s through year 30 — otherwise, “never within 30 years”.

What isn’t modeled, and why

No tax-deduction modeling. Mortgage interest and property tax cut your taxes only if you itemize, and the 2026 standard deduction is $16,100 for single filers, $24,150 for heads of household and $32,200 for married couples filing jointly. After the 2017 tax law raised the standard deduction, the share of returns that itemized fell from 30.6% in 2017 to 9.5% in 2022, according to USAFacts’ analysis of IRS data. For most households a deduction they wouldn’t claim would only distort the result; if you will itemize, read the answer as slightly unfavorable to buying.

Also excluded: taxes on investment gains or a home sale, PMI (with under 20% down, add it to the HOA field), moving costs and refinancing.

How to use the calculator

Enter the home, the rent for a comparable place and how long you’ll stay. The defaults are September 2026 starting points, not forecasts:

• Rate 6.75% — illustrative; Freddie Mac’s 30-year average was 6.76% on September 10, 2026.
• Closing costs 3% — the CFPB says they typically run 2% to 5% of the purchase price.
• Selling costs 6% — our assumption for commissions and other sale costs; commissions are negotiable and not set by law.
• Maintenance 1% — the low end of Fannie Mae’s 1%–4% rule of thumb.
• Appreciation 3% — FHFA’s index rose 2.1% in the year to the second quarter of 2026; local markets vary.
• Rent increase 3% — the CPI for rent of primary residence rose 2.7% in the year to August 2026 and about 4.2% a year over the prior decade.
• Renter’s insurance $180 a year — the NAIC average was $171 in 2022.
• Investment return 6% — an assumption, before taxes; try 4% and 8%.

A worked example

Defaults: a $400,000 home with 20% down ($80,000), 3% closing costs ($12,000), 6.75% for 30 years, 1% tax, $2,000 insurance, 1% maintenance, 6% selling costs and 3% appreciation, against $2,300 rent rising 3% a year, $180 of renter’s insurance, a 6% return and a 7-year stay.

The mortgage payment is $2,075.51, so owning costs $2,908.85 in the first month against $2,315.00 for renting. The renter starts with $92,000 invested and adds the difference monthly. After 7 years the home is worth $491,950; minus $29,517 of selling costs and the $290,520 loan balance, buying leaves $171,913. The renter holds $186,420, so renting wins by $14,507. Stay longer and it flips: buying catches up in year 10 and leads by $45,806 after 15 years, as rent keeps rising while the mortgage payment stays fixed.

Break-even years under different assumptions

Each row changes one default. Positive gaps mean buying is ahead; negative gaps mean renting is.

Rent and the assumed return matter as much as the mortgage rate: at an 8% return buying never catches up for good, while 3% selling costs move break-even from year 10 to year 7.

Tips for reading the result

• Time is the biggest lever: closing and selling costs take years of appreciation and loan paydown to earn back.
• Compare like with like — rent for a similar home in the same area.
• The renter’s edge assumes the savings really get invested.
• Run a pessimistic case with lower appreciation and higher maintenance.

Sources & references

• IRS — Tax inflation adjustments for tax year 2026 — standard deduction of $16,100, $24,150 and $32,200.
• USAFacts — Trends in itemized deductions since TCJA — 30.6% of returns itemized in 2017 and 9.5% in 2022.
• CFPB — Figure out how much you want to spend — closing costs typically 2% to 5% of the purchase price.
• Freddie Mac Primary Mortgage Market Survey — 30-year fixed average of 6.76% on September 10, 2026.
• Fannie Mae — How to build your maintenance and repair budget — 1% to 4% of the home’s value per year.
• FHFA House Price Index, 2026 Q2 — U.S. house prices up 2.1% year over year.
• BLS CPI: Rent of primary residence (via FRED) — index values used for the 1-year and 10-year rent growth figures.
• National Association of Realtors — What the NAR settlement means — broker commissions are fully negotiable and not set by law.
• Insurance Information Institute — homeowners and renters insurance statistics (NAIC data) — $171 average renters premium in 2022.