Rent vs. Buy Calculator — Is It Better to Rent or Buy a Home?
Model the full picture over your planned stay: rents that rise each year, property tax, maintenance, vacancy, home appreciation and what your down payment could earn if invested.
Results
Net Worth Over Time: Rent vs. Buy
Monthly Cost in Year One
Compare Scenarios
Save different housing markets or holding periods, then view them side by side.
Renting vs. Buying: What Really Matters
Buying builds equity and protects you from rent increases, but it comes with interest, property tax, maintenance and a large down payment that stops earning returns. Renting is cheaper upfront and keeps your capital invested, but your rent rises every year and builds no equity. The winner depends on how long you stay and how the numbers compare in your market.
How This Calculator Compares the Two Paths
Each year, the buyer's net worth is the home equity (home value minus the remaining loan balance). The renter's net worth is the down payment plus any monthly cash-flow advantage, invested at your chosen return rate. The calculator tracks both over your holding period and highlights the year buying becomes the better choice.
Frequently Asked Questions
Is it better to rent or buy a home?
It depends on how long you stay, the price and rent in your market, the mortgage rate, and what your money could earn if invested. Buying usually wins for longer horizons because rents rise and you build equity; renting often wins for short stays or when the down payment could earn more than home appreciation.
How is the rent vs. buy decision calculated?
The calculator models net worth over your holding period. If you rent, the down payment plus any monthly cash-flow advantage is invested. If you buy, you build home equity while paying interest, property tax and maintenance. The option with the higher net worth at the end wins.
How many years should you stay in a home to make buying worth it?
As a rule of thumb, buying usually beats renting after 4 to 7 years, because that is roughly how long it takes for equity and rent increases to offset closing costs. Run the calculator with your numbers to find your own break-even year.