Rent vs Buy Calculator — Is It Really Cheaper to Own?

For buying: down payment, all mortgage payments (P&I), property taxes, maintenance (estimated at 1% of home value/year), HOA fees, and closing costs (estimated at 3%). It then subtracts equity built and the appreciated home value at the end of the period. For renting: all monthly rent payments over the period, plus the investment growth you'd earn on the down payment if you'd invested it instead (opportunity cost).

Renting wins when you factor in opportunity cost — the down payment money could be invested and compounding in the stock market. In expensive markets, rent is often cheaper than a mortgage payment, and the difference invested can outpace home appreciation. Renting also wins in the short term (under 5–7 years) because buying closing costs and transaction fees take years to recoup.

The break-even point is the number of years you'd need to stay in the home before buying becomes financially better than renting. Before that point, you'd be financially better off renting. After it, buying comes out ahead due to equity, appreciation, and locked-in mortgage payments vs rising rents. The national average is typically 5–7 years, but it varies widely by market.

Mortgage interest is tax-deductible if you itemize, but since the 2017 Tax Cuts and Jobs Act raised the standard deduction, most Americans no longer itemize. Only about 10% of taxpayers itemize today. If you have a large mortgage and high income, the deduction may be meaningful — but for most buyers, the tax benefit is smaller than commonly assumed.

This calculator doesn't include renter's or homeowner's insurance, moving costs, or the non-financial benefits of homeownership (stability, customization, pride of ownership). It also doesn't model PMI (required if you put down less than 20%) or the tax implications of selling a home. These factors can shift the result meaningfully in specific situations.