Rent vs Buy Calculator

Compare the total cost of renting vs buying over your planned time horizon.

Buying

$
$
%
%
%
%

% of home value per year

Renting

$
%
%

If you invested the down payment instead

years

Total Buy Cost

—

All-in over period

Total Rent Cost

—

Rent paid over period

Home Equity Built

—

At end of period

Better Choice

—

By net cost

When Buying Wins

  • You plan to stay 5+ years (closing cost recovery)
  • Local price-to-rent ratio under 20
  • You have stable income and emergency fund
  • Mortgage payment is similar to or less than rent
  • Strong appreciation market

When Renting Wins

  • You may move within 3-4 years
  • Price-to-rent ratio is over 25 (very expensive market)
  • You have better investment opportunities for the down payment
  • Job/income uncertainty
  • You want flexibility without maintenance responsibility

Break-Even Rule of Thumb

Many financial advisors cite 3-5 years as the break-even point where buying becomes cheaper than renting. In expensive markets it's often 7-10 years. The calculator above shows the exact crossover point for your specific numbers.

Related Guides

Related Data

Compare rental prices across metros and states at PlainRent. Explore property tax rates by county at PlainPropertyTax. Compare mortgage lenders at PlainLender.

Disclaimer: Projections assume constant appreciation and return rates. Real outcomes vary. This calculator simplifies tax benefits and doesn't account for all transaction costs.

Frequently Asked Questions

Is buying always better than renting?
No — it depends on your timeline, market, and finances. Buying beats renting if you stay 5+ years in most markets, have strong credit, and the price-to-rent ratio is reasonable (<20). Renting wins if you might move in 2-3 years (closing costs require recovery time), live in expensive coastal cities, or need financial flexibility.
What is the price-to-rent ratio?
Divide home price by annual rent for a comparable property. Under 15 = strongly favors buying. 15-20 = neutral. Over 20 = renting may be smarter. San Francisco is 40+, making renting often smarter. Atlanta is ~15, where buying clearly wins long-term.
What are the hidden costs of buying?
Beyond the mortgage: closing costs (2-5% of purchase price), property taxes ($3,000-15,000+/year), homeowner's insurance ($1,000-3,000/year), PMI (if < 20% down), HOA fees, and maintenance (budget 1-2% of home value/year). New owners often underestimate maintenance.
How does home appreciation factor in?
Historical US home appreciation averages 3-4%/year (roughly matching inflation). High-appreciation markets can be much higher, but appreciation is location-specific. Don't count on appreciation to bail out a bad buy — buy when the monthly economics make sense even without appreciation.

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