Rent vs Buy Calculator
Compare the net cost of renting vs buying over your stay, with breakeven year, buyer equity and the renter portfolio. Free, no sign-up, and it runs in your browser.
Dedicated page: /en/rent-vs-buy-calculator
20% is $80,000.00.
Default checked 10 Nov 2026: 7.18% for a 30-year fixed mortgage (Freddie Mac survey, week of 5 Nov 2026). Check the current value here.
Default checked 10 Nov 2026: 7%, the long-run stock market average after inflation is about 7% a year. Check the average stock market return here.
Estimate only, not financial advice. This is a pre-tax comparison: it does not model the mortgage interest deduction, the standard deduction, or tax on investment gains, which can move the result if you itemize. The breakeven year is usually 4 to 7 years. Non-financial reasons, stability, freedom to renovate, moving costs, also matter.
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Quick answer
A rent vs buy calculator compares the net cost of renting and buying a home over the years you plan to stay. Enter the rent, the home price, the mortgage rate and the running costs, and it shows which side is cheaper, the breakeven year, the buyer equity and the renter investment portfolio.
About this Rent vs Buy Calculator
Compare the net cost of renting vs buying over your stay, with breakeven year, buyer equity and the renter portfolio. It is one of the Money and Finance on ToolUstad, and like every tool here it runs entirely in your browser: nothing you type, paste or open is uploaded to a server, and there is no sign-up or usage limit.
What is a rent vs buy calculator?
A rent vs buy calculator compares the true cost of the two ways of living in a home, over the years you actually plan to stay. Rent of $1,800 a month against a $400,000 home with $80,000 down at 7.18% over 30 years, staying 7 years: buying costs $182,590.69 net and renting costs $14,841.89 net, so renting is cheaper by $197,432.57.
How the net cost is worked out
Net cost of buying is the upfront cash plus all ownership payments minus the equity after selling costs. Ownership payments are the mortgage, property tax, insurance, maintenance, HOA and PMI. Net cost of renting is the total rent minus the investment growth on the cash a renter keeps invested.
The breakeven year and the stay length
The breakeven year is the first year buying becomes cheaper than renting, simulated to 30 years. In the example there is no breakeven within 30 years, because the rent is low against the price and the rate is 7.18%. The stay length is the biggest lever: buying and selling costs are 2% to 8% of the price, and they take 5 to 7 years to recover. A 3-year stay almost always loses to renting, and a 15-year stay usually wins.
Best practices
- Decide the stay length first: under 5 years, renting usually wins; over 7 years, buying usually wins.
- Compare net cost, not monthly payment: the payment builds equity, the rent does not, and owning has costs renting never has.
- Test the rate and the appreciation: a 1% lower mortgage rate or 1% higher appreciation can move the breakeven by years.
- Keep the renter honest: the comparison assumes the renter invests the difference, so ask whether you really would.
Common mistakes to avoid
- Comparing the mortgage payment with the rent and ignoring tax, insurance, maintenance and selling costs.
- Forgetting the selling cost of about 6%, which is $24,000 on a $400,000 home.
- Assuming the home appreciates fast, when 3% a year is the long-run average.
- Buying for a short stay, where the closing costs alone wipe out any gain.
Who is the rent vs buy calculator for?
Renters deciding whether to buy, buyers checking whether a home is worth the price, and anyone moving to a new city who needs to know whether to rent first. It is an estimate, not financial advice.
Learn: how to use the Rent vs Buy Calculator
- Enter your rent, how fast it rises, and how many years you plan to stay.
- Enter the home price, down payment, mortgage rate and term.
- Add property tax, insurance, maintenance, HOA, PMI and closing costs.
- Set home appreciation and the investment return a renter would earn.
- Read the net cost of each side, the breakeven year, the buyer equity and the renter portfolio.
Features
- Net cost of buying vs net cost of renting over your planned stay
- Breakeven year: the first year buying becomes cheaper, simulated to 30 years
- Buyer equity after selling costs, year by year
- Renter portfolio: upfront cash and the monthly difference, invested at your return
- True monthly cost of owning: P and I, tax, insurance, maintenance, HOA and PMI
- Rent rise each year, against home appreciation each year
- Buying and selling closing costs as a percent of the price
- Mortgage rate field with the Freddie Mac 30-year average checked on 10 Nov 2026
- Year-by-year net cost table for the first 15 years
Worked example
Rent of $1,800 a month against a $400,000 home with $80,000 down at 7.18% over 30 years, staying 7 years: buying costs $182,590.69 net and renting costs $14,841.89 net, so renting is cheaper by $197,432.57. Owning costs $2,784.46 a month before maintenance and PMI, against $1,800 rent. After 7 years the buyer has $169,953.64 of equity, and the renter investing the upfront cash and the monthly difference at 7% holds $270,031.07. Buying never pulls ahead within 30 years at these assumptions. At a 6.18% rate over 15 years, the buyer equity is $356,681.27.
Frequently asked questions
Is it better to rent or buy a house?
It depends on the numbers and how long you stay. At $1,800 rent against a $400,000 home at 7.18%, renting is cheaper by $197,432.57 over 7 years, and buying never pulls ahead within 30 years.
What is the breakeven year in rent vs buy?
The first year the net cost of buying falls below the net cost of renting. Net cost of buying is the upfront cash plus all ownership payments minus the equity after selling costs. In the example above there is no breakeven within 30 years.
How long do you need to stay for buying to make sense?
Usually 5 to 7 years, because buying and selling closing costs are 2% to 8% of the price and take years to recover. At a $400,000 home, buying costs are about $8,000 and selling costs about $24,000. A short stay almost always loses to renting.
Does the renter really invest the difference?
The calculator assumes the renter invests the upfront cash and the monthly difference between owning and renting, at the return you set. That is the honest comparison, because the buyer money is tied up in the house.
What costs of owning do people forget?
Maintenance at about 1% of the home value a year, property tax, insurance, HOA fees, PMI below 20% down, and the selling cost of about 6%. The calculator includes all of them.
What is the 5% rule for rent vs buy?
Multiply the home price by 5% and divide by 12: that is the monthly cost of owning before the mortgage principal. A $400,000 home is $1,666.67 a month by the rule, against $1,800 rent, which suggests buying is close.
Does buying build wealth faster than renting?
Only if the home appreciates and the renter does not invest the difference. In the example, the buyer has $169,953.64 of equity after 7 years and the renter has $270,031.07 invested, so the renter is ahead. When the rent is high and the rate is low, the buyer pulls ahead.
Should I count the mortgage interest tax deduction?
It helps if you itemize, which fewer people do since the standard deduction rose. The calculator is pre-tax and does not count it, which keeps the comparison simple and slightly favours renting. If you itemize, buying is a little better than shown.
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