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Rent vs Buy Calculator

See the true cost of buying vs renting over your full hold period. Break-even year, monthly cost, equity, and opportunity cost update live as you tune the inputs.

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Buying

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Renting

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Assumptions

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Break-even
Year 6
10-yr net delta
$54,006
Buying is cheaper
Monthly buy cost
$2,909
PITI + HOA + maintenance, year 1
Monthly rent cost
$2,215
Rent + renters insurance, year 1

Buying breaks even in year 6. Over your 10-year hold, buying comes out about $54,006 ahead.

Net cost = cumulative cash out, minus home equity + appreciation (net of selling costs) for buying, or minus investment growth on the down-payment-equivalent for renting.

Educational content only. ROIStack provides analytical tools, not financial, investment, or tax advice. See full disclaimer.

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How rent vs buy actually pencils

The rent vs buy question is not "which is cheaper this month". It is "which puts me further ahead in N years, after every real cost". Buying looks worse on a payment basis and often better on a net-worth basis, but only if you stay long enough for equity, appreciation, and (some) tax deductions to outpace closing costs, maintenance, and the investment gains you gave up by tying money into a down payment.

The formula

Net buy cost by year N = cumulative mortgage payments + property tax + insurance + HOA + maintenance + upfront (down payment + closing) minus tax savings, minus (home value at year N times appreciation, less selling costs, less remaining loan balance).

Net rent cost by year N = cumulative rent + renters insurance, minus the investment growth on the capital a buyer would have committed to a down payment plus closing (grown at your assumed market return).

Benchmarks worth knowing

  • Break-even 5 to 7 years: the healthy default in most US markets.
  • Rent-to-price under 0.5 percent/mo: renting almost always wins on cash flow.
  • Rent-to-price over 0.8 percent/mo: buying often wins if you can stay 5+ years.
  • Selling costs 6 to 9 percent: commissions plus title plus transfer taxes. This is the tax on leaving early.

Where rent vs buy math goes wrong

  • Ignoring opportunity cost. A $80,000 down payment invested at 7 percent doubles in a decade. Leaving that out inflates buying.
  • Assuming aggressive appreciation. Long-run US home appreciation is roughly 3 to 4 percent nominally. Punching in 8 percent makes any deal look great.
  • Forgetting maintenance. 1 percent of value per year is a floor, not a ceiling. Older homes run higher.
  • Overstating tax benefits. Most owners take the standard deduction and get zero incremental benefit from mortgage interest.
  • Underestimating selling costs. Exiting in year 3 to a 6 percent commission wipes out most of the equity built.

Glossary

  • PITI: Principal, Interest, Taxes, Insurance. The core monthly ownership cost.
  • SALT cap: $10,000 federal cap on the state and local tax deduction, including property tax.
  • Opportunity cost: the return you gave up by putting capital into a down payment instead of investing it.
  • Break-even year: the first year the cumulative net cost of buying is less than or equal to renting.
  • Selling costs: agent commissions, title, transfer taxes, and prep, usually 6 to 9 percent of the sale price.

Frequently asked questions

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Estimates only, based on the inputs you provide and third-party data. Not investment, tax, accounting, or legal advice. See our full disclaimer.