US Rent vs. buy calculator

Compare the true cost of renting vs. buying — including opportunity cost on your down payment.

By Ward Last reviewed 26 May 2026 Methodology

Renting

Monthly rent (USD)Annual rent increase (%)

Buying

Home price (USD)Down payment: 20%

$80,000.00

Mortgage rate (% APR)Property tax (% of home value / yr)Maintenance (% of home value / yr)

Assumptions

Home appreciation (% / yr)Investment return on down payment (% / yr)Time horizon: 10 years

Over 10 years, buying saves

$52,589.14

Year-by-year (cumulative net cost)

Year	Renting	Buying	Î”
1	$26,400.00	$38,271.41	Rent +$11,871.41
2	$53,592.00	$76,934.82	Rent +$23,342.82
3	$81,599.76	$116,017.68	Rent +$34,417.92
4	$110,447.75	$155,549.33	Rent +$45,101.58
5	$140,161.19	$195,561.20	Rent +$55,400.01
6	$170,766.02	$236,086.90	Rent +$65,320.88
7	$202,289.00	$277,162.40	Rent +$74,873.40
8	$234,757.67	$318,826.19	Rent +$84,068.52
9	$268,200.40	$361,119.45	Rent +$92,919.04
10	$302,646.41	$404,086.23	Rent +$101,439.82

Buying cost includes opportunity cost of down payment (invested at 7% / yr). Selling costs estimated at 6%.

Want the full picture? Rent vs. Buy: Making the Right Decision →

How the rent-vs-buy comparison works

A real rent-vs-buy comparison isn't "mortgage vs. rent" — it's total cost of ownership over your time horizon vs. total cost of renting plus the growth your down payment would earn if invested instead.

Buying side: mortgage interest + property tax + insurance + HOA + maintenance + closing costs in/out, minus appreciation gained and equity built.

Renting side: rent paid over the same period + rent inflation, minus the compounded return on the down payment money invested elsewhere.

The break-even year is when buying's net cost catches up to or surpasses renting.

Worked example

Home price: $400,000, 20% down ($80,000), $320,000 mortgage at 6.5% / 30 years
Equivalent rent: $2,400/month (rising 3%/year)
Annual appreciation: 3%
Investment return on down payment if invested: 7%
Maintenance: 1.5% of home value/year
Property tax: 1.2%; insurance: 0.4%; closing costs in: 2.5%; out: 7%

Year 1: buying costs more (closing costs upfront). Year 5: buying catches up but hasn't surpassed renting. Year 8: buying decisively cheaper. Year 30: buying ahead by roughly $400,000+ in net wealth. The exact break-even depends heavily on your local price-to-rent ratio, expected appreciation, and your assumed investment return.

The opportunity cost trap

Most casual rent-vs-buy comparisons forget that the down payment, if not used to buy, would compound somewhere else. $80,000 invested at a 7% real return for 10 years is about $157,000. That's not an abstract loss — it's wealth you genuinely could have had. The calculator above credits this against the buying side.

Common mistakes

Forgetting maintenance and capital expenses. Plan for 1–2% of home value per year in upkeep, plus occasional five-figure capital items (roof, HVAC, foundation).
Underestimating selling costs. Agent commission + transfer taxes + lawyer fees commonly total 6–8% of sale price.
Assuming you'll stay forever. People move on average every 7–10 years.
Comparing rent to mortgage only. True cost of ownership runs roughly 40–60% higher than headline P&I.

What this calculator doesn't cover

Tax deductibility of mortgage interest (varies by market and changes over time)
Capital gains exemption on primary residence sales
Rent control and rent stabilisation regimes
Specific local market dynamics (vacancy rates, price seasonality, interest rate trajectories)

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Compound interest

Savings growth over time

Frequently asked questions

Is it cheaper to rent or buy?

It depends on how long you stay, local price-to-rent ratio, mortgage rate, and what return you'd earn investing the down payment instead. Below roughly 5 years buying usually loses, because closing costs and selling fees (typically 8–10% of price round-trip) overwhelm equity gains. Past 7–10 years buying often wins. The calculator above does the full comparison for your numbers.

How long do I need to stay to break even on buying?

The typical break-even point is 5–7 years in most US markets, longer in expensive coastal cities. The two biggest drivers are transaction costs (typically 8–10% of price round-trip) and the opportunity cost of your down payment if it were invested instead. The chart above shows your specific break-even year.

What's the opportunity cost of a down payment?

Money tied up in a down payment can't grow in the stock market. At a 7% real return, $60,000 invested for 10 years grows to about $118,000 — that's the opportunity cost. Real-estate appreciation often beats inflation but rarely matches stocks long-term, which is why the rent-vs-buy math is tighter than it looks.

Does this calculator account for home appreciation?

Yes — you set an annual appreciation rate (typically 3–4% long-term in stable markets, though regions vary widely). The calculator credits that appreciation against your buying cost and offsets it against the opportunity cost of investing the down payment elsewhere.

Are there hidden costs of homeownership?

Beyond mortgage, property tax, and insurance, expect 1–2% of home value per year in maintenance and repairs, plus occasional capital expenses (roof, HVAC, foundation) that can hit $10,000–$30,000. Most rent-vs-buy comparisons underestimate these. Closing costs on purchase (2–5%) and selling (6–8%) also rarely show up in casual mortgage-vs-rent comparisons.

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