Free rent vs buy calculator. Find out whether renting or buying a home makes more financial sense for your situation. Enter your rent, home price, mortgage rate and down payment to see which option saves you more money over 5, 10, 20 and 30 years.
How to Use This Rent vs Buy Calculator
Enter your current monthly rent and expected annual rent increase on the left side. Enter the home purchase price, down payment percentage and mortgage interest rate on the right side. Fill in the shared assumptions including home appreciation rate, property tax rate, maintenance cost, home insurance, your investment return rate and estimated closing costs. Use the slider to choose how long you plan to stay. Then click Calculate Rent vs Buy.
What This Calculator Shows You
This calculator shows you the total net cost of renting versus buying over your chosen time period. It accounts for every major cost on both sides. For renting it includes total rent paid, renter’s insurance and the opportunity cost of not investing your down payment. For buying it includes mortgage payments, property tax, maintenance, insurance, closing costs and the equity and home value you gain at the end. It also shows you the breakeven point — the number of years after which buying becomes cheaper than renting — and a winner at the 5, 10, 20 and 30 year mark.
What Is the Breakeven Point
The breakeven point is the number of years you need to stay in a home before buying becomes cheaper than renting. In the first few years of homeownership the costs are very high due to closing costs, interest-heavy mortgage payments and the opportunity cost of your down payment. Over time as you build equity and the home appreciates in value buying eventually becomes cheaper. The breakeven point varies widely depending on your local market, interest rate and down payment but typically falls between 4 and 10 years.
What Is Opportunity Cost in This Calculator
When you buy a home you tie up your down payment and closing costs in the property. Opportunity cost is what that money could have earned if you had invested it in the stock market instead. For example if your down payment is 80000 dollars and the stock market returns 7 percent per year that 80000 dollars would grow to around 153000 dollars in 10 years. This calculator includes this opportunity cost in the renting total to give you a fair and accurate comparison.
Should I Rent or Buy Right Now
The answer depends on several factors. You should consider buying if you plan to stay in the same area for at least 5 to 7 years, if your local market is not severely overpriced relative to rents, if you have enough saved for a down payment and closing costs without depleting your emergency fund, and if buying fits your lifestyle and long term goals. You should consider renting if you plan to move within a few years, if home prices in your area are very high relative to rents, if you value flexibility and mobility, or if you do not yet have a sufficient down payment saved.
What Costs Does Buying a Home Include
Buying a home involves many costs beyond just the mortgage payment. Upfront costs include the down payment which is typically 3 to 20 percent of the purchase price and closing costs which are typically 2 to 5 percent of the purchase price. Ongoing costs include your monthly mortgage payment, property taxes which average around 1 percent of the home value per year, homeowners insurance, and maintenance and repairs which average around 1 percent of the home value per year. When you sell you will also pay agent fees of around 5 to 6 percent of the sale price.
What Is a Good Down Payment Percentage
A 20 percent down payment is the traditional recommendation because it avoids private mortgage insurance and results in lower monthly payments. However many buyers put down less. FHA loans allow as little as 3.5 percent down and some conventional loans allow 3 percent. Putting down less means higher monthly payments and more total interest paid over the life of the loan. This calculator lets you model any down payment percentage to see how it affects the rent vs buy comparison.
How Mortgage Interest Rates Affect the Decision
Higher mortgage interest rates significantly increase the cost of buying and make renting relatively more attractive. For example at a 3 percent mortgage rate on a 400000 dollar home the monthly payment is around 1686 dollars. At a 7 percent rate the same loan costs around 2661 dollars per month — nearly 1000 dollars more every month. When rates are high renting and waiting for rates to drop or for prices to adjust can be a reasonable strategy.
Frequently Asked Questions : FAQs
How long do I need to stay to make buying worth it?
Most financial experts suggest you need to plan to stay in a home for at least 5 to 7 years before buying makes financial sense. This calculator shows you the exact breakeven year for your specific numbers.
Does this calculator account for tax benefits of homeownership?
This calculator uses a simplified model. It does not include the mortgage interest deduction as this only benefits homeowners who itemize deductions and the standard deduction has made itemizing less common since 2018.
What appreciation rate should I use?
US home prices have historically appreciated at around 3 to 4 percent per year on average. However this varies enormously by city and neighbourhood. You can enter your local market’s historical rate for a more accurate comparison.
What investment return rate should I use?
The S&P 500 has historically returned around 7 percent per year after inflation. This is what the calculator uses as a default for the opportunity cost calculation on the renting side.
Is this rent vs buy calculator free?
Completely free. No sign up, no login, no limits.
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Last updated: March 2026 · Free tool by AllTheTools.com