Housing choice · Break-even horizon
Rent vs Buy Calculator
Compare the wealth available after your expected stay—not rent against mortgage principal and interest alone. Model transaction costs, equity, maintenance, property tax, rent growth, appreciation, and invested cash differences.
Quick estimate
Find the rent-versus-buy break-even point
First modeled buy break-even point
8 yr 4 moBuying first reaches the renter path within your 10-year stayBuying leads by $15,878 at the entered horizon.
This net-worth comparison assumes the renter invests the upfront cash and monthly cost difference. The break-even point is the first monthly crossover and can reverse later as assumptions compound. Income-tax effects, renovations, moving costs, rent concessions, and transaction timing are excluded.
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How this calculator works
The buying side starts with down payment and purchase costs, amortizes the mortgage monthly, grows the home value, and subtracts estimated selling costs and remaining debt at the end. The result is saleable home equity.
The result includes a monthly break-even point
The calculator tests each month for up to 50 years and reports the first point where the buyer’s saleable equity reaches the renter’s modeled investment account. It also tells you when that crossover is later than your planned stay. Because long-run assumptions can cause another crossover, treat it as the first modeled break-even—not a guaranteed permanent lead.
The renter’s opportunity cost is explicit
The renter begins with the cash the buyer used for down payment and purchase costs. Each month, the model grows that portfolio and adds the difference when modeled ownership costs exceed rent. If rent costs more, the difference reduces the renter’s portfolio.
Ownership cost is broader than the mortgage
The monthly comparison includes principal and interest, property tax, insurance, maintenance, and HOA dues. Principal is still part of cash outflow but builds equity; the end-of-horizon net-worth calculation prevents it from being treated as a permanently lost expense.
Small assumption changes compound
Home appreciation, investment return, rent growth, selling costs, and years in the home can reverse the answer. Run conservative and optimistic scenarios instead of relying on one default.
Job mobility, school needs, renovation control, repair responsibility, liquidity, and tolerance for price risk cannot be reduced to one dollar result.
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Worked example
Suppose a comparable choice is a $500,000 home or $2,800 monthly rent, with $100,000 down and a ten-year stay. The renter begins by investing the $100,000 down payment plus the purchase costs the buyer pays.
At the horizon, the tool compares home value net of sale costs and mortgage balance with the renter’s modeled investment account. Change appreciation and investment return together; choosing only an optimistic value for one side biases the result.
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Questions people ask
Is renting throwing money away?
No. Rent buys housing and flexibility. Owners also have unrecoverable interest, taxes, insurance, maintenance, and transaction costs. The meaningful comparison includes equity and the renter’s invested difference.
How long should I stay for buying to make sense?
There is no universal period. Purchase and sale costs make short stays harder, while local appreciation, rent, rates, maintenance, and investment returns determine the actual crossover.
Does the model include tax deductions?
No. Itemization, deduction limits, filing status, state rules, and future law make tax effects household-specific. Add them only with a tax-aware analysis.
Why can the renter portfolio be low or negative?
If rent exceeds modeled ownership cash cost, the renter must draw from the starting investment or other wealth to keep the comparison’s lifestyle cash flow equal.
What maintenance rate should I use?
Use a property-specific reserve informed by age, condition, systems, climate, and upcoming work. A percentage is only a planning shorthand.
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Sources and model basis
Published rules and formulas are linked below. Values supplied by the visitor remain scenario inputs, not factual claims.
- CFPB: Making the decision to rent or buyEquity, tax complexity, maintenance, and full housing-cost considerations
- CFPB: Financial considerations of buyingTransaction costs, time horizon, repair responsibility, and recurring expenses
- CFPB buying-or-renting toolDecision prompts for flexibility, maintenance, and financial readiness