Rent vs. Buy Calculator
Find the exact month when buying becomes cheaper than renting — accounting for taxes, appreciation, maintenance, and opportunity cost.
Your Numbers
🏠 Buying
🏢 Renting
Ready to explore buying?
Compare mortgage rates and see what you could qualify for in minutes.
The Real Cost of Each Option
Buying costs include your mortgage, taxes, insurance, and maintenance (typically 1% of home value per year). But buying also builds equity through both payments and appreciation. Renting is simpler but rent typically rises over time with no equity to show for it.
The price-to-rent ratio (home price ÷ annual rent) is a useful signal: under 15 favors buying, above 20 often favors renting, above 25 strongly favors renting.
Rent vs. Buy: Real-World Scenarios
Scenario 1: Buying a $400,000 Home vs. Renting for $2,000/Month
With a $400,000 home purchase (20% down at 7%), your all-in monthly cost including taxes and insurance is roughly $2,850/month. Renting the equivalent for $2,000/month saves $850/month short-term, but rent typically increases 3%/year. The break-even point where buying becomes cheaper is approximately 6–7 years. If you plan to stay 10+ years, buying almost always wins financially in this scenario.
Scenario 2: High-Cost Market — $900,000 Home, $3,500/Month Rent
In expensive markets like coastal California, a $900,000 home with 20% down at 7% produces a PITI payment near $5,400/month. Renting a comparable home for $3,500/month saves $1,900/month. The break-even in this high price-to-rent ratio market stretches to 12–15+ years. For those who might relocate within a decade, renting is clearly the stronger financial choice here.
Scenario 3: Starter Home in Mid-Cost Market — $250,000 at 7%
A $250,000 home with 10% down at 7% has a PITI of roughly $1,850/month (including PMI). If comparable rentals cost $1,600/month in the same area, the price-to-rent ratio favors buying sooner — break-even arrives around 3–4 years. The relatively low price point and modest rental premium make this one of the clearest cases for buying.
Scenario 4: The Opportunity Cost Angle
Putting $80,000 down on a $400,000 home is a large commitment. That same $80,000 invested in a diversified index fund at 7% annual return grows to $157,000 in 10 years. Meanwhile, home equity from appreciation (at 3%/year) on $400,000 adds roughly $107,000. The home wins on equity but loses on pure investment return — the right choice depends heavily on your local market, lifestyle, and timeline.