Total cost of renting and of buying a home over the years, and the year buying wins
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 6 Oct 2026.Buying a $400,000 home with 20% down at 6.5%, against renting for $2,200 a month, breaks even in year 8 with 3% yearly growth in prices and rent and a 5% return on the cash. Over 10 years buying costs $275,475 net and renting $304,710, a $29,235 difference.
Enter the home price, down payment, mortgage rate and term, and the buying and selling costs.
Enter the property tax rate, insurance, maintenance and any monthly owner costs.
Enter the rent, how fast you expect rent and home prices to rise, and what your cash would earn invested.
Choose how many years you expect to stay.
Read the cost of each over that time and the first year in which buying costs less.
The Rent vs Buy Calculator adds up what buying a home and renting one would cost you over the same number of years, and finds the first year in which buying costs less.
The cost of buying is the down payment and buying costs, every mortgage payment, property tax and maintenance as a percent of the home's value, insurance and other monthly costs such as HOA dues, plus the opportunity cost: what the down payment and buying costs would have earned if invested instead. From that the calculator takes away what you would keep on selling at the end: the price after growth, less selling costs, less the loan still owed.
The cost of renting is the rent, rising each year at the rate you choose, plus renters insurance.
Break-even. Buying has high costs at the start and the end, so it usually loses over short stays and wins over long ones. The break-even year shows where the lines cross with your figures; changing home price growth or rent by one point can move it by several years, which is worth trying.
Every figure is yours. Price growth, rent growth, the mortgage rate, the investment return, tax, maintenance and costs are inputs, and the figures shown at first are examples, not forecasts. Money can be shown in dollars or rupees; only the symbol changes.
What it does not do. Only the upfront cash is treated as invested: if owning costs more each month than renting, that difference is not invested for the renter, and the other way round. Income tax is left out, including the mortgage interest deduction and tax on a gain when you sell. PMI is not a separate line; add it to the monthly owner costs. The mortgage rate is fixed.
Buying usually wins if you stay long enough to recover the costs of buying and selling. In the example, a $400,000 home with 20% down at 6.5% against $2,200 of rent, renting costs less for 7 years and buying from year 8. Shorter stays favour renting; the answer depends on your own figures.
Cash put into a home cannot earn a return elsewhere. The calculator charges buying with what the down payment and buying costs would have grown to at your investment return. At 5% a year, $92,000 would have earned $37,453 over 7 years, which is counted as a cost of buying.
For each year from 1 to 40 the calculator works out the net cost of buying, after selling the home at the end of that year, and the total rent paid. The break-even year is the first year in which buying costs no more than renting. With the example figures it is year 8.
Down payment, buying costs, mortgage payments, property tax, homeowners insurance, maintenance, HOA or other monthly costs, selling costs and the lost return on the cash. Property tax and maintenance are a percent of the home value, 1.1% and 1% a year in the example, so they rise as the home gains value.
Property tax is included. Income tax is not: there is no mortgage interest deduction and no tax on a gain when you sell. In the US most sellers of a main home can exclude up to $250,000 of gain, or $500,000 for a married couple, under the home sale exclusion, which the Home Sale Exclusion Calculator covers.
The sale price is the largest single figure in the calculation. On a $400,000 home, one point more growth a year adds about $50,000 to the price after 10 years. In the example, 4% growth brings the break-even year forward from 8 to 5, and 2% pushes it out to 12. Try a low, middle and high figure rather than one guess.
Rates and rules change; check the source before you rely on a figure.
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Also works as: Buy vs Rent Calculator.
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