Rent vs. Buy Calculator
Buying isn't automatically the smart move, and paying rent isn't throwing money away. Which one leaves you better off comes down to a few numbers: the price, the rent, your mortgage rate, what your savings could earn elsewhere and, often most of all, how long you'd stay.
Put in your numbers and the calculator follows both paths month by month for 30 years. You'll see what each one costs, the equity you'd build, what you'd walk away with if you sold, how much you could borrow against the home, and the year buying catches up, if it ever does. It's free, and there's nothing to sign up for.
Last updated: September 2026
The home
Your loan
Owning costs
Renting instead
The market
Selling and borrowing
Buying catches up in year 9
Estimates before income taxes: no mortgage interest or property tax deduction, and no tax on investment gains or on the sale. No moving costs. Not financial, tax or legal advice.
What You'd Have: Buy vs. Rent
Your Home Equity Over Time
First Month: What Each Costs
Owning: $2,872.62 a month. Renting: $2,215.00 a month.
Year by year
| Year | Home value | Loan balance | Equity | Could borrow | If sold | If you buy | If you rent | Difference |
|---|---|---|---|---|---|---|---|---|
| 1 | $412,000 | $316,423 | $95,577 | $13,177 | $70,857 | $70,857 | $104,671 | Rent +$33,814 |
| 2 | $424,360 | $312,607 | $111,753 | $26,881 | $86,291 | $86,291 | $117,472 | Rent +$31,181 |
| 3 | $437,091 | $308,535 | $128,556 | $41,137 | $102,330 | $102,330 | $130,396 | Rent +$28,066 |
| 4 | $450,204 | $304,191 | $146,013 | $55,972 | $119,001 | $119,001 | $143,433 | Rent +$24,433 |
| 5 | $463,710 | $299,555 | $164,155 | $71,413 | $136,332 | $136,332 | $156,573 | Rent +$20,241 |
| 6 | $477,621 | $294,609 | $183,012 | $87,488 | $154,354 | $154,354 | $169,804 | Rent +$15,450 |
| 7 | $491,950 | $289,332 | $202,618 | $104,228 | $173,101 | $173,101 | $183,115 | Rent +$10,014 |
| 8 | $506,708 | $283,701 | $223,007 | $121,665 | $192,604 | $192,604 | $196,490 | Rent +$3,886 |
| 9 | $521,909 | $277,694 | $244,216 | $139,834 | $212,901 | $212,901 | $209,916 | Buy +$2,985 |
| 10 | $537,567 | $271,284 | $266,283 | $158,770 | $234,029 | $234,029 | $223,377 | Buy +$10,652 |
| 11 | $553,694 | $264,444 | $289,249 | $178,511 | $256,028 | $256,028 | $236,855 | Buy +$19,172 |
| 12 | $570,304 | $257,147 | $313,157 | $199,097 | $278,939 | $278,939 | $250,332 | Buy +$28,607 |
| 13 | $587,413 | $249,361 | $338,053 | $220,570 | $302,808 | $302,808 | $263,787 | Buy +$39,021 |
| 14 | $605,036 | $241,053 | $363,983 | $242,976 | $327,681 | $327,681 | $277,198 | Buy +$50,482 |
| 15 | $623,187 | $232,189 | $390,998 | $266,360 | $353,606 | $354,123 | $291,058 | Buy +$63,065 |
| 16 | $641,883 | $222,732 | $419,151 | $290,774 | $380,638 | $382,456 | $305,611 | Buy +$76,846 |
| 17 | $661,139 | $212,641 | $448,498 | $316,271 | $408,830 | $412,799 | $320,892 | Buy +$91,907 |
| 18 | $680,973 | $201,874 | $479,099 | $342,905 | $438,241 | $445,274 | $336,936 | Buy +$108,338 |
| 19 | $701,402 | $190,386 | $511,016 | $370,736 | $468,932 | $480,014 | $353,783 | Buy +$126,231 |
| 20 | $722,444 | $178,129 | $544,316 | $399,827 | $500,969 | $517,157 | $371,472 | Buy +$145,684 |
| 21 | $744,118 | $165,051 | $579,067 | $430,243 | $534,420 | $556,850 | $390,046 | Buy +$166,805 |
| 22 | $766,441 | $151,097 | $615,345 | $462,056 | $569,358 | $599,251 | $409,548 | Buy +$189,703 |
| 23 | $789,435 | $136,208 | $653,226 | $495,339 | $605,860 | $644,524 | $430,025 | Buy +$214,498 |
| 24 | $813,118 | $120,323 | $692,795 | $530,171 | $644,008 | $692,843 | $451,527 | Buy +$241,317 |
| 25 | $837,511 | $103,373 | $734,138 | $566,636 | $683,887 | $744,395 | $474,103 | Buy +$270,292 |
| 26 | $862,637 | $85,289 | $777,348 | $604,820 | $725,590 | $799,376 | $497,808 | Buy +$301,568 |
| 27 | $888,516 | $65,993 | $822,523 | $644,820 | $769,212 | $857,992 | $522,698 | Buy +$335,293 |
| 28 | $915,171 | $45,405 | $869,766 | $686,732 | $814,856 | $920,463 | $548,833 | Buy +$371,630 |
| 29 | $942,626 | $23,438 | $919,188 | $730,663 | $862,631 | $987,023 | $576,275 | Buy +$410,748 |
| 30 | $970,905 | $0 | $970,905 | $776,724 | $912,651 | $1,057,917 | $605,089 | Buy +$452,829 |
How the comparison works
Both paths start with the same cash. If you buy, it goes to the down payment and closing costs. If you rent, it stays invested and grows at the investment return you set. Then, every month, the calculator adds up what owning and renting cost, and whichever one costs less invests the difference. So both sides spend the same amount each month, and the only question is who ends up with more.
Owning costs are principal and interest on a fixed-rate mortgage, property tax and upkeep (each a percentage of the home's value, updated once a year), homeowners insurance, HOA dues, and mortgage insurance if you put down less than 20%. Mortgage insurance is a yearly percentage of the original loan, and it stops once the balance is paid down to 78% of the purchase price or the loan reaches its midpoint, whichever comes first. Renting costs are rent plus renters insurance. Home prices, rent, and insurance and HOA dues each go up once a year at the rates you choose.
At the end of every year, the calculator asks what you'd have if you moved then. If you bought, it's the home's value minus selling costs and the loan balance, plus anything you invested along the way. If you rented, it's your investments. The break-even year is the first year the buying side matches or beats the renting side. Closing costs up front and selling costs at the end are why buying usually starts behind and needs time to catch up.
What it leaves out: income taxes (no mortgage interest or property tax deduction, no tax on investment gains or on the profit from a sale), moving costs, utilities, renovations and refinancing. Prices and rents can fall: enter a negative rate (down to -20% a year) to see what that does. It assumes the cheaper side really invests the difference every month; if that money would get spent instead, the side doing the saving looks better here than it would in real life. And it can't weigh the reasons to rent or buy that have nothing to do with money.
Frequently asked questions
Is it better to rent or buy a home?
It depends on your numbers, and it's rarely as obvious as people make it sound. The big levers are how long you'd stay, how the price compares with the rent on a similar place, your mortgage rate, and what your down payment could earn if you invested it instead. Stay only a few years and the costs of buying and selling can wipe out any gain. Stay a long time and a shrinking loan balance plus rising rents can tip things toward buying. Try your own numbers above, then change one at a time to see which ones actually drive the answer. And money isn't everything: flexibility, stability and control over your home matter too.
How long do you need to live in a home for buying to be worth it?
Long enough to earn back what it costs to get in and out. Freddie Mac says buyers should be ready to pay 2 to 5% of the price in closing costs, and selling means agent commissions (which are negotiable) plus your own closing costs. On the calculator's default $400,000 home, 3% to buy is $12,000 gone before your first payment. There's no single right number of years. The break-even year above shows it for your numbers, and it can move a lot when you change the price, the rent or how fast prices rise.Sources: Freddie Mac: What are closing costs and how much will I pay?; National Association of Realtors: What the NAR settlement means for home buyers and sellers
What is home equity, and can you borrow against it?
Equity is what your home is worth minus what you still owe on it. It grows as you pay down the loan and if the home's value rises. You can borrow against it with a home equity loan (a lump sum, usually at a fixed rate) or a home equity line of credit, or HELOC (you draw on it as you need it, usually at a variable rate). Lenders generally cap the amount at a percentage of the home's appraised value, minus what you owe on your mortgage, and that percentage varies by lender. The calculator uses 80% unless you change it. But it's a loan secured by your house: if you can't repay it, you could lose your home. Lenders can generally freeze or cut a HELOC if your home's value falls, and you'll generally have to pay off a HELOC when you sell.Sources: CFPB: What you should know about home equity lines of credit (PDF); FTC: Home equity loans and home equity lines of credit
Is paying rent throwing money away?
No. Rent buys you a place to live, and owning comes with costs you never get back either: mortgage interest, property tax, insurance, upkeep, mortgage insurance if you put down less than 20%, and the costs of buying and selling. Only the principal part of your mortgage payment turns into equity, and early on that part can be small. On the calculator's default loan, about $289 of the first $2,023 payment goes to principal; the other $1,733 is interest. So the fair comparison isn't rent against your whole mortgage payment. It's what each choice costs you that you won't get back, and that's what this calculator lines up side by side.
When does PMI go away?
With a conventional loan and less than 20% down, you'll usually pay private mortgage insurance (PMI), which protects the lender, not you. For single-family homes that are your main residence, on loans that closed on or after July 29, 1999, the federal Homeowners Protection Act lets you ask your servicer to cancel it once your balance reaches 80% of the home's original value (the lower of the sale price and the appraised value), if you meet conditions like a good payment history. It has to end automatically when your balance is scheduled to reach 78%, as long as you're current on payments, and no later than the month after the loan's midpoint (15 years into a 30-year loan) if you're current. Higher-risk loans and lender-paid mortgage insurance can follow different rules, and FHA and VA loans have their own. The calculator keeps it simple: it charges PMI only with less than 20% down and drops it once the balance reaches 78% of the purchase price or the loan reaches its midpoint, whichever comes first.Sources: CFPB: When can I remove private mortgage insurance (PMI) from my loan?; CFPB: What is private mortgage insurance?; 12 U.S.C. 4901: Definitions (cancellation date, original value, termination date); 12 U.S.C. 4902: Termination of private mortgage insurance
Does buying a home lower your taxes?
Sometimes. This calculator leaves income taxes out, so here's what it isn't counting. Mortgage interest and property tax can cut your federal income tax, but only if you itemize deductions instead of taking the standard deduction, and both deductions have limits. Profits on investments you sell are generally taxed, which would trim the investment balances here. And when you sell a home you've owned and lived in as your main home for at least two of the five years before the sale, you can generally exclude up to $250,000 of profit from your income, or $500,000 on a joint return with your spouse, if you meet the IRS conditions. Taxes can push the answer either way, so if they could change your decision, run your numbers by a tax professional.Sources: IRS Publication 936: Home Mortgage Interest Deduction; IRS Topic 503: Deductible taxes; IRS Topic 501: Should I itemize?; IRS Topic 409: Capital gains and losses; IRS Topic 701: Sale of your home
Renting for now?
Before you sign your next lease, upload it. The first check is free and pulls out the basics, like the rent and the lease dates. If you want the full picture, a paid renter report walks through the fees, rent increases and what it would cost to break the lease early.
Start a Free Lease Check →Disclaimer: This calculator gives estimates for learning and comparison, based only on the numbers you enter. It isn't financial, tax or legal advice, and it can't predict home prices, rents, interest rates or investment returns. Mortgage, tax and property rules vary by loan type and location, and they change. Before you decide, talk with a qualified professional, such as a lender, a tax advisor or a HUD-approved housing counselor.