Rent vs Buy Calculator

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🏠 Rent vs Buy Calculator
Should you rent or buy a home? Compare the true long-term cost of renting versus buying — including equity, opportunity cost, and break-even point.
🔑 Renting
Monthly rent ($)
Annual rent increase (%)
Renter’s insurance ($/mo)
Security deposit ($)

🏡 Buying
Home price ($)
Down payment (%)
Mortgage rate (%)
Loan term (years)
Annual property tax (%)
Annual maintenance (%)
HOA fees ($/mo)
Home insurance ($/mo)

⚙️ Assumptions
Years to compare
Home appreciation (%/yr)
Investment return (%/yr)
Closing costs (%)

🔑 Renting costs
Total rent paid
Insurance
Opportunity gain
Net cost of renting

VS
🏡 Buying costs
Mortgage payments
Tax + insurance + HOA
Maintenance
Closing costs
Home equity gained
Net cost of buying

📈 Cumulative cost over time

⚖️ Key decision factors
📅
Break-even point
🔄
Flexibility
Renting gives you freedom to move without penalty. Buying ties you to a location — moving within 3–5 years usually means losing money on transaction costs.
Rent wins
📈
Wealth building
Buy wins
🛡️
Risk & stability
Homeowners are exposed to market risk — property values can fall. Renters face rent increases and the risk of being asked to leave. Neither is risk-free.
Depends

Is it better to rent or buy a home?

The rent vs buy decision is one of the most significant financial choices most people make. The answer depends on how long you plan to stay, local home prices vs rent levels, mortgage rates, your investment alternatives, and personal lifestyle factors.

What is the break-even point?

The break-even point is the number of years after which buying becomes cheaper than renting. In the US, this typically ranges from 3 to 8 years. In expensive cities it can exceed 15 years.

What is opportunity cost in this context?

When you buy a home, you tie up your down payment in illiquid equity. If you had rented instead and invested that down payment at 7% annual return, you’d be building wealth differently. This calculator accounts for that opportunity cost.

Frequently Asked Questions

Does buying always build more wealth than renting?
Not necessarily. If home appreciation is slow and you invest the rent savings and down payment aggressively, renting can generate comparable or better wealth.
What’s the 5% rule for renting vs buying?
Multiply the home’s value by 5% and divide by 12. If your monthly rent is lower than this number, renting is likely the better financial choice.
How does the mortgage rate affect the decision?
At 3% rates, buying becomes favorable quickly. At 7%+ rates, the monthly mortgage is much higher relative to rent, extending the break-even point.
Should I include tax benefits of homeownership?
Mortgage interest is tax deductible for itemizers, but the 2017 tax reform reduced this benefit for most buyers. This calculator does not include tax deductions.

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