Rent vs Buy Calculator

Enter rent, expected rent growth, home price, mortgage rate, term, down payment, property tax, insurance, maintenance assumption, expected appreciation, and your expected holding period. The calculator runs both scenarios month by month and reports the cumulative cost (or net wealth) of each over your time horizon.

The break-even crossover point depends heavily on three inputs: how long you stay, how much the home appreciates, and what return you'd earn on the down-payment cash if you invested it instead. Short stays favor renting because closing costs and selling fees haven't amortized. Long stays usually favor buying if appreciation matches historical norms.

Don't trust any rent-vs-buy result that doesn't include opportunity cost on the down payment. A $80,000 down payment growing at 7% in index funds is $625,000 after 30 years — competing with the home equity you'd build over the same period.

The full calculation: month-by-month, the buying scenario tracks mortgage payment + property tax + insurance + maintenance + HOA, minus mortgage principal accumulation (which is forced savings), plus home appreciation. The renting scenario tracks rent + renter's insurance, minus the investment return on the cash you'd have spent on down payment + closing costs (compounding monthly at your assumed rate). At month N, compare cumulative net wealth in each scenario. The crossover is the breakeven month — before it, renting wins; after, buying wins.

Worked example: $500k house, 20% down ($100k), 7% mortgage, 1.2% property tax, 0.5% insurance, 1% maintenance, 3% annual appreciation. Renting: $2,800/month, 4% annual rent growth. Stock returns 7%. Year 1: buying costs ~$3,800/month all-in; renting costs $2,800; difference invested. After 5 years, renting is ahead by ~$15,000 because of selling costs you'd hit on a 5-year hold. After 10 years: buying is ahead by ~$60,000. After 20 years: buying is ahead by ~$280,000 — appreciation compounded heavily. The crossover here is around year 7. Change appreciation to 1% (slow market) and the crossover moves to year 15+. Change rent growth to 6% (hot market) and crossover moves earlier.

What people miss: maintenance is the most underestimated input. Real numbers from homeowners across long periods land at 1-2% of home value per year, not the 0.5% most spreadsheets use. New construction is cheaper for the first decade; older homes can run 2-3% in years where major systems fail. Also: tax deductibility of mortgage interest only matters if you itemize, which most filers don't post-2017 due to the higher standard deduction. Don't include the deduction unless you'd actually itemize.