Rent vs Buy CalculatorIs it better to rent or buy a home where you live?
Two paths, one honest comparison. Tell us how long you’ll stay, what you’d pay to rent and what it costs to buy — and see which choice leaves you wealthier, the year buying finally pulls ahead, and exactly what would change the answer.
By Manzoor Ahmad · 13+ years of web development & SEO experienceUpdated October 19, 2026 with current rates and prices
Market assumptions — the numbers that decide most rent-vs-buy outcomes
After 7 years
—
The wealth race
Your net worth on each path, year by year — home equity after selling costs for buyers, invested savings for renters.
What would flip the verdict?
Keeping everything else the same:
Price-to-rent ratio
Renting for 7 years
Buying for 7 years
Is it better to rent or buy? Buying is usually better if you’ll stay long enough to pass the break-even point — the year your home equity, after selling costs, overtakes what a renter would have built by investing the down payment and monthly savings. With today’s national figures (a $417,500 home, 7.40% mortgage, 3.5% appreciation and $2,400 comparable rent), that point arrives around year 11. Stay a shorter time and renting tends to leave you wealthier.
Price-to-Rent Ratio: A Quick Rent-or-Buy Check
Divide a home’s price by a year of rent for a similar home. Under about 15 usually tips toward buying; above 20 tips toward renting; in between, your stay and assumptions decide. It’s a screen, not a verdict — but it explains why the same calculator says “buy” in one city and “rent” in another.
A ratio of 25 sits firmly in “rent-favored” territory — though it compares the median home with the median rental of every size, so a like-for-like house rental lowers it. The calculator uses your own home and rent so the ratio reflects your actual choice.
When Does Buying Beat Renting?
Using the calculator’s default scenario, here is each household’s net worth by year. The buyer starts far behind — closing costs and selling costs eat the early equity — and only overtakes the renter in year 11.
| After | Buyer’s net worth | Renter’s net worth | Buying vs. renting |
|---|---|---|---|
| 1 year | $75,325 | $111,253 | −$35,928 |
| 3 years | $111,275 | $142,784 | −$31,509 |
| 5 years | $150,401 | $175,787 | −$25,386 |
| 7 years | $193,027 | $210,310 | −$17,283 |
| 10 years | $264,336 | $265,041 | −$704 |
| 11 years | $290,278 | $284,091 | +$6,186 |
| 13 years | $345,765 | $323,433 | +$22,332 |
Assumptions: $417,500 home, 20% down, 7.40% 30-year loan, 1% property tax, $1,800 insurance, 1% maintenance, 3% closing and 6% selling costs, 3.5% appreciation; $2,400 rent rising 3% a year; 6% return on invested savings. Change any of them above to see your own timeline.
What This Rent vs Buy Calculator Counts
A fair comparison has to treat both households the same way. This one simulates every month of your stay for both paths, and tracks:
- Opportunity cost. The renter invests the down payment and closing costs on day one.
- Monthly savings, both ways. Whichever path is cheaper that month invests the difference.
- Every cost of owning. Interest, property tax, insurance, maintenance, HOA and PMI.
- PMI drop-off. Mortgage insurance stops once the loan falls to 80% of the original price.
- Rising rent. Your rent grows each year at the rate you choose.
- The cost of getting out. Selling costs come off the buyer’s equity at the end.
- Appreciation and paydown. The buyer’s equity grows from both.
- A real break-even year. Found by running the comparison up to 30 years.
It deliberately leaves out the mortgage interest deduction, because since the standard deduction roughly doubled in 2018 most homeowners no longer itemize. If you do itemize, buying looks somewhat better than shown.
When Renting Wins — and When Buying Wins
Renting usually wins when…
- You expect to move within about 5 years.
- The price-to-rent ratio in your area is above 20.
- Mortgage rates are high relative to rent growth.
- Your job, family or city plans are uncertain.
- You would genuinely invest the savings instead of spending them.
Buying usually wins when…
- You’ll stay past the break-even year — often 7–12 years today.
- Local rents are high or rising faster than prices.
- You can put 20% down and avoid PMI.
- A fixed payment matters more to you than flexibility.
- You value the forced savings of paying down a mortgage.
Rent vs Buy Myths the Numbers Don’t Support
“Renting is throwing money away.”
Owners also have unrecoverable costs: interest, property tax, insurance, maintenance and the 8%–10% round trip of buying and selling. In the default scenario the buyer’s unrecoverable costs exceed the renter’s total rent for roughly the first three years.
“A mortgage is just paying yourself.”
On a 30-year loan at 7.40%, almost 89% of the first year’s payments go to interest, not equity. Principal paydown only becomes the larger share decades in.
“Homes always go up, so buying always wins.”
Appreciation is the single biggest swing factor. Use the “What would flip the verdict?” panel to see the growth rate your home would need for buying to win within your stay. If prices near you are out of reach, compare building with the cost to build a house calculator, or a lower-cost manufactured home with the mobile home loan calculator.
Turning the Answer Into a Plan
- If renting winsSet a realistic ceiling with the rent affordability calculator, then grow the money you’re not putting into a house with the compound interest calculator so the comparison holds in real life.
- If buying winsPrice the actual loan — down payment, PMI and closing costs — with our mortgage calculators, and check your area’s rate with the property tax calculator instead of using the 1% default.
- If you already ownWeigh staying put against tapping your equity with the home equity loan calculator.
- Explore the restEvery rent, home-buying and real estate tool lives in the property & real estate calculators hub.
Rent or Buy: Questions People Ask
Is it better to rent or buy a house in 2026?
It depends on how long you’ll stay and your local prices. With a $417,500 median price, 7.40% mortgage rates and 3.5% appreciation, buying typically needs around a decade to overtake renting a comparable home. In lower-priced or high-rent areas, the break-even can come within five years.
How long do you need to live in a house for buying to be worth it?
Long enough to pass the break-even year, when your equity after selling costs exceeds what you would have built renting and investing. A common rule of thumb is five years, but at today’s rates seven to twelve years is more typical. The calculator finds your exact year.
What is the price-to-rent ratio?
Home price divided by a year’s rent for a similar home. A $400,000 house that would rent for $2,000 a month has a ratio of about 16.7. Ratios below 15 generally favor buying and above 20 favor renting.
Is renting really throwing money away?
No. Rent buys housing, just as interest, property tax, insurance and maintenance do for owners. What matters is which path leaves you wealthier after all unrecoverable costs and the return on money you didn’t tie up in a home.
What is opportunity cost in rent vs buy?
It’s what your down payment, closing costs and any monthly savings would have earned invested elsewhere. A renter who invests $100,000 at 6% gains about $6,000 in the first year — a real benefit a fair comparison has to include.
Does the calculator include the mortgage interest deduction?
No. Most homeowners take the standard deduction, so the interest deduction doesn’t lower their taxes. If you itemize, buying will look a little better than this calculator shows.
What appreciation rate should I use?
Over long periods U.S. home prices have tended to rise a few percent a year, but local results vary widely and NAR reported just 1.3% year-over-year growth in the September 2026 median price. Test a cautious and an optimistic rate to see how sensitive your answer is.
How do higher mortgage rates affect rent vs buy?
Higher rates raise the monthly cost of owning and push most early payments toward interest, which delays the break-even year. Each percentage point on a 30-year loan changes the payment on a $334,000 balance by roughly $230 a month.
Should I buy if I can only put 5% or 10% down?
You can, but you’ll usually pay PMI until you reach 20% equity and you’ll have less cushion if prices dip. The calculator adds PMI automatically below 20% down and removes it once the loan reaches 80% of the price.
Is this rent vs buy calculator free and private?
Yes. It is free, needs no sign-up and runs entirely in your browser. Your rent, price and financial assumptions are not sent to DexoCalc or stored.
Manzoor Ahmad
13+ years of web development & SEO experience · Founder, DexoCalc
Manzoor builds and maintains every DexoCalc calculator, including the full mortgage library. This tool runs a month-by-month simulation of both households so opportunity cost, PMI removal, rent growth and selling costs are all counted, and it starts from current national price, rent and rate data.
Sources
Results are estimates based on the assumptions you enter, not financial advice. Future home prices, rents, interest rates and investment returns are uncertain — test several scenarios and talk with a financial professional before deciding.