Inputs
If you rented and invested the down payment
Results
▲ Buying Advantage
$163,581
More details
ℹ️ This is a simplified model. Actual results depend on local taxes, HOA fees, maintenance, rent growth, and your personal financial situation. Not financial advice.
How to Use
- 1Enter the price of the home you're considering buying.
- 2Input your down payment percentage and the current mortgage rate you qualify for.
- 3Enter the monthly rent for a comparable home in the same area.
- 4Set your expected home appreciation and investment return assumptions.
- 5Choose your comparison period (5 years is most common for break-even analysis).
Frequently Asked Questions
When does buying beat renting financially?+
Buying generally wins when: (1) you stay in the home long enough to break even on transaction costs (typically 4–7 years), (2) home appreciation outpaces rent growth, and (3) your mortgage payment is close to or below rent.
Is the rent vs. buy decision purely financial?+
No. Non-financial factors — stability, flexibility, lifestyle, desired location, and control over your space — often outweigh the math. Renting can be the smart choice even when buying would be financially advantageous.
What is the price-to-rent ratio?+
The price-to-rent ratio is home price ÷ annual rent. Below 15: buying is attractive. 15–20: neutral. Above 20: renting is likely better financially. Many coastal US cities currently have ratios above 25.
How does home appreciation affect the rent vs. buy decision?+
Higher appreciation strongly favors buying. In markets with 4–5% annual appreciation, buying typically wins within 4–5 years. In flat or declining markets, renting and investing the difference can outperform buying.
What costs does the calculator not include?+
The model simplifies property taxes, HOA fees, maintenance costs, insurance, and rent inflation. In practice, these add $500–$1,000+/month to ownership costs, making the comparison more nuanced.
This calculator is for informational purposes only and does not constitute financial, legal, or tax advice. Consult a qualified professional before making real estate or financial decisions.