Payments and schedules
Rent vs Buy Calculator: Is It Cheaper to Rent or Buy a Home?
Compare what you would spend renting with what buying would really cost after you sell, so you can see which path leaves you better off over your time frame.
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Rent vs buy
Results
In plain words
Renting would cost about $202,289 over your stay. Buying would cost about $206,029 after you sell the home, then worth about $491,950, and keep $132,312 of equity. The difference is -$3,740: a positive number means buying comes out ahead, a negative number means renting does.
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Key figures
- How much buying saves (negative = renting saves)-$3,740
- Total rent paid$202,289
- Net cost of buying$206,029
- Your equity after selling$132,312
- Total rent paid
- Net cost of buying
View chart as table
| Year | Total rent paid | Net cost of buying |
|---|---|---|
| Year 1 | $26,400 | $61,447 |
| Year 2 | $53,592 | $86,548 |
| Year 3 | $81,600 | $111,281 |
| Year 4 | $110,448 | $135,623 |
| Year 5 | $140,161 | $159,546 |
| Year 6 | $170,766 | $183,025 |
| Year 7 | $202,289 | $206,029 |
Compare home price growth
| Scenario | Total rent paid | Net cost of buying | How much buying saves (negative = renting saves) | Buying wins from year |
|---|---|---|---|---|
| 1% | $202,289 | $261,567 | -$59,278 | Not reached |
| 3% | $202,289 | $206,029 | -$3,740 | Not reached |
| 5% | $202,289 | $143,420 | $58,869 | 4 years |
Year by year
| Year | Total rent paid | Net cost of buying | Equity if you sell |
|---|---|---|---|
| Year 1 | $26,400 | $61,447 | $30,664 |
| Year 2 | $53,592 | $86,548 | $45,926 |
| Year 3 | $81,600 | $111,281 | $61,815 |
| Year 4 | $110,448 | $135,623 | $78,363 |
| Year 5 | $140,161 | $159,546 | $95,604 |
| Year 6 | $170,766 | $183,025 | $113,575 |
| Year 7 | $202,289 | $206,029 | $132,312 |
How to use this calculator
- Enter your current rent and how fast you expect it to rise each year.
- Enter the home price, your down payment, the interest rate and the loan term. The rate box starts at the national weekly average.
- Add the property tax rate, yearly insurance and a maintenance estimate.
- Choose a yearly home value change and how many years you plan to stay.
- Read the difference, then change the years and the home value change to see when the answer flips.
Comparing rent with a mortgage payment is misleading. Rent is a pure cost, while part of a mortgage payment builds equity you get back when you sell. Buying also comes with costs renters never see: closing costs, property tax, insurance, repairs and the cost of selling. This calculator puts both paths on the same footing for the number of years you expect to stay.
How this rent vs buy calculator works
Renting: the calculator adds 12 months of rent for each year, raising the rent by your yearly increase.
Total rent = sum of (rent × 12) for each year, with rent × (1 + rent increase) each new year
Buying: it adds the cash you pay upfront and every yearly cost of owning, then subtracts what you keep when you sell:
Cost of owning = down payment + 3% buying costs + yearly (principal and interest + tax + insurance + maintenance)
Equity at sale = home value at the end × (1 − 6% selling costs) − remaining loan balance
Net cost of buying = cost of owning − equity at sale
Difference = total rent − net cost of buying
Principal and interest use the standard formula M = P × r ÷ (1 − (1 + r)^−n). Tax and maintenance are a
percentage of each year’s home value, which grows by your yearly value change. A positive difference means
buying is cheaper; a negative one means renting is cheaper.
Worked examples
Example 1: staying seven years
Assume $2,200 rent rising 3% a year, versus a $400,000 home with 10% down, an assumed 6.5% rate on a 30-year loan, a 1.1% tax rate, $1,800 a year insurance, 1% maintenance and 3% yearly value growth.
- Rent: $2,200 a month in year one rises to about $2,627 by year seven. Total: about $202,289.
- Upfront cost of buying: $40,000 down plus $12,000 (3%) buying costs = $52,000.
- Seven years of owning: principal and interest about $191,137 (about $2,275 a month), tax about $33,715, insurance $12,600 and maintenance about $30,650. With the upfront cash, the total is about $320,102.
- At sale: the home is worth about $491,950. Selling costs of 6% take about $29,517 and the loan balance is about $325,498, so you keep about $136,934 of equity.
- Net cost of buying: $320,102 − $136,934 = about $183,168.
- Difference: $202,289 − $183,168 = about $19,121 in favor of buying.
Example 2: same home, shorter or flatter
Keep everything the same but stay only three years. Rent totals about $81,600, while the net cost of buying is about $101,516, so renting comes out ahead by about $19,917. The upfront and selling costs have not had time to be earned back.
Now return to seven years but set home value growth to 0%. Equity at sale falls to about $50,502, the net cost of buying rises to about $264,036, and renting wins by about $61,747. Over a short or medium stay, the answer depends heavily on prices.
What your result means
The difference is the money one path saves over the other in your scenario. A small difference, positive or negative, means the choice is close and other factors, such as stability, flexibility and the home you want, should decide. A large positive difference that holds up when you lower the value growth is a stronger signal to buy. Run three versions (cautious, middle and hopeful value growth) and look at the cautious one first.
Program rules that change the answer
| Loan type | Down payment you could enter | Extra cost the calculator leaves out |
|---|---|---|
| Conventional | 3% or more | PMI under 20% down, until removed |
| FHA | 3.5% with a 580+ score | 1.75% upfront MIP and annual MIP |
| VA | 0% | Funding fee unless exempt |
| USDA | 0% | Upfront and annual guarantee fees |
A smaller down payment lowers your upfront cost but adds mortgage insurance and a larger balance at sale. Check those costs with the mortgage payment calculator or the FHA MIP calculator, and compare programs in our types of mortgage loans guide.
Assumptions
- Buying costs are fixed at 3% of the price and selling costs at 6% of the final value.
- The rate is fixed; the rate box starts at the national weekly average, which is not an offer.
- Insurance stays flat; tax and maintenance grow with the home’s value.
- Mortgage insurance, HOA dues, tax deductions and investment returns on the down payment are not included.
- Rent rises once a year at a steady rate.
Common mistakes
- Comparing rent with the full mortgage payment. The principal part comes back to you as equity.
- Ignoring buying and selling costs. They are the main reason short stays favor renting.
- Assuming prices always rise. Try 0% and a negative value change before you decide.
- Underestimating maintenance. Roofs, heating systems and appliances wear out on their own schedule.
- Forgetting flexibility. Selling takes time and money if your job or family plans change.
Limits of this estimate
This is a simplified financial comparison, not advice on whether you should buy. It cannot price stability, freedom to move or the risk of a large repair. Before you commit, check what you can afford with the home affordability calculator and get a Loan Estimate for real costs. A HUD-approved housing counselor can talk through renting and buying with you for free or at low cost.
For context, the national average 30-year fixed rate was 7.40% as of October 15, 2026 (Freddie Mac). FHA, VA and USDA rates are set by each lender and often differ.Source: Freddie Mac Primary Mortgage Market Survey, via FRED
Frequently asked questions
Is it cheaper to rent or buy a house?
It depends mostly on how long you stay and how home values change. Buying has large upfront and selling costs, so renting is often cheaper over a few years, while buying can come out ahead over a longer stay if the home holds its value.
How long do I need to stay for buying to make sense?
Enough years to recover the closing costs when you buy and the costs of selling. In our example, buying loses after three years but wins after seven. Change the years input to find your own break-even point.
Why is the mortgage payment not the cost of buying?
Part of each payment repays the loan, which comes back to you as equity when you sell. The calculator counts everything you pay, then subtracts the equity you keep after selling costs, which gives the true net cost.
What home value change should I enter?
Nobody can predict it. Test a cautious figure, a middle one and zero or a negative number. If buying only wins with strong price growth, treat that as a warning sign.
Does this include the money my down payment could earn if invested?
No. The calculator does not count the return you might earn by investing your down payment while renting, which would favor renting somewhat. It also leaves out tax effects.
Does it include PMI or HOA dues?
No. If you put less than 20% down on a conventional loan, add PMI with the mortgage payment calculator, and remember HOA dues. Both raise the cost of buying.
What costs of renting are left out?
Renters insurance, moving costs and security deposits are not included. They are usually small next to the costs of buying, but you can add them to the rent for a fuller picture.
Sources
Read the guides
Related calculators
- Mortgage payment See what a home would really cost each month, not just principal and interest, but the taxes, insurance, HOA dues and mortgage insurance that lenders count too.
- Closing costs Get a planning range for your closing costs and the total cash you will need on closing day, before you have a Loan Estimate in hand.
- Amortization schedule See how each payment is split between interest and principal, how fast your balance falls, and how much interest the loan costs over its full term.
- Extra payments Find out how much a fixed extra principal payment each month shortens your mortgage and how much interest it saves, so you can weigh it against other uses for the money.