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Rent vs Buy Calculator — Rent or Buy?

Compare the true cost of renting versus buying

Buying Saves

$95,322

Monthly Buy

$2,511

Monthly Rent

$1,800

Break-Even

Yr 1

Buying

$
%

$70,000 down

%

Renting

$
%

Additional Costs

%
$
%
years
%
Buying is cheaper over 10 years

You save $95,322 by buying

Monthly Buying

$2,511

Monthly Rent

$1,800

Total Rent (10yr)

$247,620

Net Buy Cost (10yr)

$152,297

Equity Built

$232,998

Break-Even Year

Year 1

Total Cost of Renting

$247,620

over 10 years

Net Cost of Buying

$152,297

costs - equity + down payment

Monthly Buying Breakdown

Mortgage (P&I)$1,770
Property Tax$350
Home Insurance$100
Maintenance$292
Total Monthly (Buying)$2,511
Monthly savings renting$711

Home Value & Equity (10 years)

Purchase Price$350,000
Home Value (Year 10)$470,371
Appreciation+$120,371
Equity Built$232,998

Frequently Asked Questions

Q

Is it cheaper to rent or buy a home?

It depends on your timeline, location, and market conditions. In the first 3-5 years, renting is usually cheaper due to closing costs and high early mortgage interest. Over 7-10+ years, buying often wins as you build equity and lock in housing costs while rent keeps rising 3-5% annually.

FactorRentingBuying
Monthly CostLower initiallyHigher (mortgage + taxes + insurance)
Long-term CostRises with inflationFixed mortgage, rising equity
FlexibilityHigh — easy to moveLow — selling takes time/money
Wealth BuildingNone from housingEquity + appreciation
Q

What is the break-even point for buying vs renting?

The break-even point is typically 5-7 years in most US markets. This means you need to stay in a purchased home at least 5-7 years for buying to be cheaper than renting. The exact point depends on home prices, mortgage rates, rent levels, and appreciation rates in your area.

Q

What hidden costs of homeownership should I consider?

Beyond the mortgage, homeowners pay property taxes (1-2% of home value annually), homeowner insurance ($1,000-3,000/year), maintenance and repairs (1-2% of home value), HOA fees ($200-500/month in some areas), and closing costs (2-5% at purchase). These add 30-50% on top of the mortgage payment.

  • Property taxes: 1-2% of home value per year
  • Home insurance: $1,000-3,000 per year
  • Maintenance/repairs: 1-2% of home value per year
  • HOA fees: $0-500+ per month
  • Closing costs: 2-5% of purchase price (one-time)
Q

How much should I save for a down payment?

The standard down payment is 20% to avoid PMI (private mortgage insurance). However, FHA loans require only 3.5% down, and some conventional loans accept 3-5%. A 20% down payment on a $350,000 home is $70,000. Smaller down payments mean higher monthly costs but faster market entry.

Example Calculations

1$350K Home vs $1,800/month Rent (10 years)

Inputs

Home Price$350,000
Down Payment20%
Mortgage Rate6.5%
Monthly Rent$1,800
Home Appreciation1%
Comparison Period10 years

Result

Break-Even YearYear 6
Monthly Buying Cost$2,512
Total Rent (10yr)$247,620
Net Buy Cost (10yr)$226,000
Equity Built$149,000

Monthly buying cost is $2,512 (mortgage $1,770 + tax $350 + insurance $100 + maintenance $292) vs $1,800 rent. With 1% appreciation, buying breaks even around year 6 as equity offsets the higher monthly cost.

2Short-Term: 3 Years in Flat Market

Inputs

Home Price$500,000
Down Payment10%
Mortgage Rate6.5%
Monthly Rent$2,500
Home Appreciation0%
Comparison Period3 years

Result

WinnerRenting saves $30,000
Monthly Buying Cost$3,861
Total Rent (3yr)$92,727
Net Buy Cost (3yr)$122,858

Monthly buying cost is $3,861 (mortgage $2,844 + tax $500 + insurance $100 + maintenance $417) vs $2,500 rent. In a flat market with 0% appreciation, 3 years is too short to build enough equity, making renting $30K cheaper.

Formulas Used

Monthly Mortgage Payment

M = P × [r(1+r)^n] / [(1+r)^n - 1]

Calculates the fixed monthly mortgage payment using the loan amortization formula.

Where:

M= Monthly mortgage payment
P= Loan principal (home price minus down payment)
r= Monthly interest rate (annual rate / 12)
n= Total number of payments (years × 12)

Total Rent Cost

Total Rent = Σ (Monthly Rent × 12 × (1 + Annual Increase)^year)

Sums all rent payments over the comparison period including annual increases.

Where:

Monthly Rent= Starting monthly rent
Annual Increase= Yearly rent increase rate (e.g., 3%)

Complete Guide to the Rent vs Buy Decision

The rent vs buy decision is one of the biggest financial choices you will make. While homeownership has long been considered the cornerstone of the American Dream, the math tells a more nuanced story. In many markets, renting and investing the difference can build more wealth than buying, especially if you plan to move within 5 years.

When comparing costs, look beyond the monthly payment. A $350,000 home with a 6.5% mortgage costs roughly $2,200/month for the loan alone, plus $350 for taxes, $100 for insurance, and $290 for maintenance — totaling about $2,940/month. If comparable rent is $1,800/month, the $1,140 difference invested at 7% return could grow to $195,000 over 10 years.

The tipping point in favor of buying depends heavily on home appreciation and how long you stay. If homes appreciate 3-4% annually and you stay 7+ years, buying usually wins. But in flat or declining markets, or if you move frequently, renting preserves financial flexibility and avoids the substantial transaction costs of buying and selling a home.

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Related Resources

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Last Updated: Mar 9, 2026

This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.

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