Rent vs Buy Calculator
Should you rent or buy a home? This free rent vs buy calculator compares the total cost of homeownership against renting over time, factoring in mortgage payments, home appreciation, property taxes, investment returns on your down payment, and more. See which option builds more wealth for your situation.
Buying Costs
Renting Costs
Net Worth Comparison Over Time
| Year | Home Value | Home Equity | Renter Investments | Total Spent Owning | Total Spent Renting | Winner |
|---|---|---|---|---|---|---|
| Year 5 | $476,377 | $176,822 | $171,945 | $256,183 | $127,419 | Buy +$5k |
| Year 10 | $567,338 | $296,054 | $288,559 | $441,117 | $275,133 | Buy +$7k |
| Year 15 | $675,667 | $443,478 | $438,290 | $636,471 | $446,374 | Buy +$5k |
| Year 20 | $804,681 | $626,552 | $632,875 | $844,237 | $644,889 | Rent +$6k |
| Year 30 | $1,141,315 | $1,141,315 | $1,271,925 | $1,306,931 | $1,141,810 | Rent +$131k |
Wealth Accumulation: Buy vs Rent
▶View All 30 Years
| Year | Home Equity | Renter Investments | Difference | Winner |
|---|---|---|---|---|
| 1 | $97,804 | $96,736 | $1,068 | Buy |
| 2 | $116,353 | $114,252 | $2,101 | Buy |
| 3 | $135,681 | $132,592 | $3,089 | Buy |
| 4 | $155,825 | $151,806 | $4,019 | Buy |
| 5 | $176,822 | $171,945 | $4,877 | Buy |
| 6 | $198,711 | $193,062 | $5,649 | Buy |
| 7 | $221,534 | $215,218 | $6,316 | Buy |
| 8 | $245,335 | $238,474 | $6,860 | Buy |
| 9 | $270,159 | $262,898 | $7,261 | Buy |
| 10 | $296,054 | $288,559 | $7,495 | Buy |
| 11 | $323,072 | $315,535 | $7,537 | Buy |
| 12 | $351,266 | $343,906 | $7,359 | Buy |
| 13 | $380,691 | $373,760 | $6,932 | Buy |
| 14 | $411,408 | $405,188 | $6,220 | Buy |
| 15 | $443,478 | $438,290 | $5,188 | Buy |
| 16 | $476,967 | $473,171 | $3,796 | Buy |
| 17 | $511,944 | $509,945 | $1,999 | Buy |
| 18 | $548,482 | $548,733 | $251 | Rent |
| 19 | $586,658 | $589,663 | $3,005 | Rent |
| 20 | $626,552 | $632,875 | $6,323 | Rent |
| 21 | $668,250 | $678,658 | $10,408 | Rent |
| 22 | $711,842 | $727,718 | $15,876 | Rent |
| 23 | $757,423 | $780,325 | $22,902 | Rent |
| 24 | $805,092 | $836,734 | $31,643 | Rent |
| 25 | $854,956 | $897,222 | $42,267 | Rent |
| 26 | $907,125 | $962,082 | $54,957 | Rent |
| 27 | $961,718 | $1,031,631 | $69,913 | Rent |
| 28 | $1,018,858 | $1,106,208 | $87,350 | Rent |
| 29 | $1,078,678 | $1,186,176 | $107,498 | Rent |
| 30 | $1,141,315 | $1,271,925 | $130,610 | Rent |
How to Decide: Rent vs Buy
The decision to rent or buy depends on your local market, timeline, and financial situation. A common rule of thumb is that you need to stay in a home for at least 5 to 7 years for buying to break even compared to renting, after accounting for closing costs, maintenance, and the opportunity cost of your down payment. Your actual breakeven depends on your own numbers.
The True Cost of Homeownership
When people ask “should I rent or buy,” they often compare only the mortgage payment to their monthly rent. But the real cost of owning a home goes far beyond the mortgage. Property taxes, homeowners insurance, maintenance (a common rule of thumb is 1-2% of the home value per year), HOA fees, and the opportunity cost of your down payment all factor into the equation. Our rent vs buy calculator accounts for all of these ongoing costs in its comparison.
The Opportunity Cost of Your Down Payment
One of the most overlooked factors in the renting vs buying a home debate is what happens to your down payment money if you rent instead. A 20% down payment on a $400,000 home is $80,000. Invested in a diversified stock portfolio earning an assumed 7% average annual return, that $80,000 could grow to roughly $157,000 in 10 years. If owning costs more per month than renting, a renter can invest the difference too, compounding the advantage. This is why renting can sometimes be the smarter financial move, especially in high cost-of-living areas where home prices are far above what rent would suggest.
When Buying Usually Wins
Buying tends to be the better financial choice when you plan to stay for at least 5-7 years, when your mortgage payment (including taxes and insurance) is close to or below equivalent rent, and when home appreciation in your area keeps pace with the long-run trend (the S&P Case-Shiller U.S. National Home Price Index rose about 4.3% per year before inflation from January 1987 to June 2026). Low interest rates tilt the equation heavily toward buying. A homeowner with a 3% mortgage locked in during 2021 has a significant advantage over a renter whose rent resets higher each year.
When Renting Usually Wins
Renting tends to win when you are in an expensive market where the price-to-rent ratio exceeds 20 (meaning it costs 20 times the annual rent to buy a comparable home), when you expect to move within 3-5 years, or when mortgage rates are high relative to expected home appreciation. Renting also provides flexibility and lower upfront costs, which can be valuable for people early in their careers or unsure about their long-term location.
Frequently Asked Questions
Is it cheaper to rent or buy a home?
It depends on your local market, how long you plan to stay, mortgage rates, and your opportunity cost of capital. In expensive markets with high price-to-rent ratios, renting and investing the difference can come out ahead. In markets where the full monthly cost of owning is close to rent, buying tends to look better the longer you stay, as equity builds and if the home appreciates. Use the calculator above to compare based on your own numbers.
How long do you need to live in a home for buying to make sense?
A common rule of thumb is to plan on staying at least 5 to 7 years for buying to break even compared with renting, but the real breakeven depends on your market and your numbers. The rule of thumb reflects upfront closing costs (often estimated at 2-5% of the home price), slow equity build in early mortgage years when more of each payment goes to interest, and selling costs (often estimated at 5-6% including commissions). This calculator estimates the year buying overtakes renting in net worth from your inputs; it does not include closing or selling costs, so factor those in separately.
What is the opportunity cost of a down payment?
The opportunity cost of a down payment is the investment return you forgo by tying up that money in a home instead of investing it in the stock market or other assets. For example, an $80,000 down payment earning an assumed 7% annual return would grow to approximately $157,000 in 10 years. Our calculator factors this in by comparing the renter's investment portfolio (including the down payment amount) against the homeowner's equity.
What is a good price-to-rent ratio?
A common rule of thumb is that a price-to-rent ratio below 15 leans toward buying, while a ratio above 20 leans toward renting. The ratio is calculated by dividing the home price by the annual rent for a comparable property. For example, a $400,000 home that would rent for $2,000 per month ($24,000 per year) has a price-to-rent ratio of 16.7, which is in the middle zone where other factors like how long you plan to stay become more important.
What hidden costs of homeownership should I factor in?
Hidden homeownership costs include maintenance and repairs (a common rule of thumb is 1-2% of home value per year), property taxes (which vary widely by state and county), homeowners insurance, HOA fees if applicable, and closing costs when buying and selling. Using that rule of thumb, a $400,000 home could need $4,000-$8,000 per year in maintenance, and major replacements such as a roof or HVAC system can add thousands of dollars more.
Key Rent vs Buy Statistics
How Amortio Compares: The Most Complete Rent vs Buy Analysis
A rent-vs-buy comparison that only looks at monthly payments misses the opportunity cost of the down payment, one of the biggest factors in the analysis. Amortio's rent vs buy calculator models the full financial picture: mortgage amortization, property taxes, insurance, maintenance, home appreciation, rent increases, and the investment return you forgo by tying up your down payment in a home.
An $80,000 down payment earning an assumed 10% annual return before inflation, a rough long-run average often cited for U.S. stocks, would grow to approximately $207,500 in 10 years. This opportunity cost is frequently omitted from simplistic rent-vs-buy comparisons, leading homebuyers to underestimate the true financial advantage of renting in expensive markets.
Property taxes, homeowners insurance, maintenance, and HOA dues can add substantially to the mortgage payment alone. This calculator includes those ongoing costs to estimate a year-by-year net worth comparison between renting and buying (closing and selling costs are not included).
Already decided to buy? Check your debt-to-income ratio and see how much you can afford before applying.
Already Decided to Buy?
Use our free amortization calculator to see your exact monthly payment, interest breakdown, and how extra payments can save you thousands.
Last reviewed: September 2026. This calculator is for educational purposes. Consult a financial advisor for advice tailored to your specific situation.