Rent vs Buy Calculator
Use this free rent vs buy calculator to compare the true cost of renting and buying over the years you plan to stay — and find your break-even year.
How the comparison works: renting total is the rent you pay over the period, growing each year. Buying total is the down payment plus mortgage payments, property tax, insurance, maintenance and closing costs, minus the equity you would keep after selling (home value at the end minus the remaining mortgage balance and selling costs). The break-even year is the first year in which buying’s total net cost drops below renting’s total cost.
Fill in the rent and home price to see the comparison.
Monthly mortgage payment: —
Total cost of renting: —
Total net cost of buying: —
Difference: —
Break-even year: —
How to use the rent vs buy calculator
Renting and buying a home are hard to compare fairly, because the monthly numbers hide the real costs. Rent is money you never see again, but buying comes with a down payment, interest, tax, insurance, maintenance and selling costs — and the part of your mortgage payment that pays down the loan becomes equity you keep. This rent vs buy calculator adds up both sides over the years you plan to stay, so you can see which one actually costs less.
Step 1: Enter your monthly rent and how fast you expect rent to grow each year. The calculator uses 3% a year as a starting point, but you can change it — or set it to 0% to compare on today's rent.
Step 2: Enter the home price, your down payment as a percentage, the mortgage rate and term, and how many years you plan to stay. These are the numbers that drive the buying side.
Step 3: Adjust the running costs — property tax, home insurance, maintenance, buying closing costs and selling costs — then read the totals. The calculator shows the total cost of renting, the total net cost of buying, the difference, the break-even year and a one-line verdict.
Worked example: the clean test
A simple example shows how the equity logic works. Take a rent of $1,200 a month with 0% rent growth, a home priced at $120,000, a 0% down payment, a 0% mortgage rate, a 30-year term, a stay of 3 years, and every other rate set to 0%. The monthly mortgage payment is $120,000 divided by 360 months, which is $333.33. Renting for 3 years costs $1,200 times 36 months, which is $43,200. Buying costs $333.33 times 36 months in mortgage payments, which is $12,000. The home is still worth $120,000 because price growth is 0%, and the remaining mortgage balance is $120,000 minus the $12,000 paid off, which is $108,000. The equity built is $120,000 minus $108,000, which is $12,000. So the net cost of buying is $12,000 in payments minus $12,000 of equity, which is $0. The verdict is that buying is cheaper by $43,200 over 3 years. The point is that mortgage payments are not all lost money — the part that pays down the loan becomes equity you keep when you sell.
What buying really costs
Down payment
The down payment is the lump sum you pay up front when you buy. It is your money, not a fee, but it is tied up in the house until you sell.
Mortgage payments
Your monthly mortgage payment is part interest and part principal. Only the interest is a true cost — the principal part pays down your loan and becomes equity.
Property tax
Property tax is charged every year as a percentage of your home's value, and it rises if the home's value rises.
Home insurance
Home insurance is a monthly cost that protects the property. Renters usually pay far less, or nothing, for cover.
Maintenance
Maintenance covers repairs and upkeep — a roof, a boiler, a leaking pipe. The calculator estimates it as a percentage of the home price each year.
Closing costs
Closing costs are the one-off fees you pay when you buy, such as legal fees and taxes, estimated here as a percentage of the home price.
Selling costs
Selling costs are what you pay when you sell, such as estate agent fees, estimated as a percentage of the home's value at sale. They come off what you keep from the sale.
What break-even year means
The break-even year is the first year in which buying's total net cost drops below renting's total cost. In the early years buying is usually more expensive, because of the down payment and closing costs. Over time the balance can tip: your mortgage payments build equity, while rent keeps rising each year. If buying never becomes cheaper within the years you plan to stay, the calculator says so plainly instead of inventing a year. A short stay usually favours renting, and a long stay usually favours buying — but the exact point depends on your numbers, which is why the calculator checks year by year.
Frequently asked questions
Which is better, renting or buying?
It depends on the numbers and on your life. Buying can be cheaper over a long stay because mortgage payments build equity, while renting can be cheaper over a short stay because you avoid the down payment, closing costs and maintenance. This calculator compares the money; it cannot weigh flexibility, job moves or how much you value owning your own home.
What is break-even year?
The break-even year is the first year in which the total net cost of buying drops below the total cost of renting. The calculator checks each year up to the end of the period you plan to stay. If buying never becomes cheaper in that period, it says so plainly.
What costs does buying include that renting doesn't?
Buying includes the down payment, mortgage interest, property tax, home insurance, maintenance, closing costs and selling costs. Renters do not pay those directly, although landlords pass some of their costs on through the rent. The calculator counts the buying costs in full and sets them against the equity you build.
Does home price growth change the answer?
Yes, a lot. Faster home price growth builds equity faster, which favours buying. Falling prices do the opposite and can make buying much more expensive. Try the calculator with different growth rates — including 0% and a negative rate — to see how sensitive the answer is to that one guess.
Is this financial advice?
No. This calculator gives estimates only, based on the numbers you enter and the simple model described above. It is not financial advice. Talk to a financial adviser for personal decisions about renting or buying.
Disclaimer: These are estimates only, not financial advice. The results depend on the figures you enter and on assumptions about rent growth, home price growth and costs that may turn out differently in real life.