Should I Rent or Buy a Home?
Deciding whether to rent or buy is one of the biggest financial choices you will make. Our Rent vs. Buy Calculator compares the average monthly cost of owning a home with the cost of renting over any stay length from 1 to 30 years, then shows the break-even point where buying starts to win.
The result is an estimate based on your inputs. It cannot capture non-financial factors such as stability, flexibility, or the freedom to customize your living space.
What Is Included in the Cost of Buying?
- Principal & interest – the monthly mortgage payment on the loan amount.
- Property taxes – a yearly percentage of the home price that grows over time.
- Homeowners insurance, HOA fees and maintenance – recurring costs that rise with inflation.
- Closing and selling costs – one-time costs when you buy and when you sell (agent commissions, fees).
- Appreciation and equity – the value you recover when you sell, minus the remaining loan balance.
- Opportunity cost – what your down payment could have earned if it were invested instead.
What Is Included in the Cost of Renting?
Renting includes monthly rent (which usually increases each year), renter's insurance, one-time upfront costs, and the opportunity cost of your security deposit. Unlike a down payment, a deposit is returned, so only the lost investment return is counted.
Key Factors That Move the Break-Even Point
Length of stay
The longer you stay, the more time you have to spread out closing and selling costs. Short stays almost always favor renting.
Home appreciation vs. investment return
Higher home appreciation favors buying; a higher average investment return makes keeping your cash invested (and renting) more attractive.
Mortgage rate and rent growth
A lower mortgage rate and faster rent growth both improve the case for buying.
Frequently Asked Questions
Is it better to rent or buy a home?
It depends mainly on how long you plan to stay. Buying has high upfront and selling costs, so it usually pays off only after a break-even period. This calculator estimates that period using your own inputs.
How long should I stay in a home to make buying worth it?
Many scenarios break even between 4 and 8 years, but home appreciation, mortgage rate, rent growth and investment returns can shift that number significantly.
What costs does the calculator include when buying?
Down payment, closing costs, mortgage principal and interest, property tax, homeowners insurance, HOA fees, maintenance, selling costs, tax savings and the opportunity cost of your down payment.
What is opportunity cost?
It is the return you could have earned by investing your down payment, closing costs or security deposit instead of tying the money up in a home or a deposit.
Disclaimer: this calculator is for educational purposes only and is not financial or tax advice.