BuyingvsRenting
Rent vs Buy Calculator
Enter your home price, loan terms, and the rent you'd pay instead. The verdict compares the real net cost of each path -- not just a mortgage payment against a rent check -- including the opportunity cost of your down payment and what home equity is worth when you sell.
Your situation
What the down payment and closing costs would earn if invested instead.
Renting wins by $20,256 over 7 years
Buying becomes the cheaper choice in year 10.
Drag to see how the verdict changes the longer you plan to stay -- buying's upfront costs amortize over more years, and its equity has longer to compound.
| Buying | Renting | |
|---|---|---|
| Loan amount | $360,000 | — |
| Upfront cash | $101,250 | $0 (invested instead) |
| Total paid over 7 yrs | $378,503 | $202,289 |
| Ending asset value | $206,950 | $152,243 |
| Net cost | $171,552 | $151,296 |
How this is calculated
Buying's net cost = closing costs + total mortgage interest paid + property tax + insurance + maintenance + HOA − mortgage-interest tax savings (only if itemizing) − the home's appreciation gain, net of selling costs and any remaining loan balance. Principal you pay down isn't counted as a cost, because it comes back to you as equity when you sell.
Renting's net cost = total rent paid − what your down payment and closing costs would be worth if invested at your stated return instead of put into a home. This is the opportunity-cost method the New York Times' own rent-vs-buy calculator popularized: the fair comparison isn't rent-vs-mortgage-payment, it's rent-vs-(mortgage payment + everything else, minus what your cash builds either way).
This answer is tax-sensitive. The mortgage-interest deduction only helps if your itemized deductions exceed the standard deduction ($15,000 single / $30,000 married filing jointly for 2025). Most homeowners don't itemize, so the calculator assumes the standard deduction unless you check "I itemize deductions."
| Year | 1 | 3 | 5 | 7 | 10 | 15 |
|---|---|---|---|---|---|---|
| Buying, net cost | $62,634 | $101,023 | $137,405 | $171,552 | $218,024 | $280,254 |
| Renting, net cost | $20,325 | $62,259 | $105,916 | $151,296 | $222,573 | $349,610 |
On the default numbers (a $450,000 home, 20% down, 6.5% rate, $2,200/mo rent, 6% investment return), renting leads through year 9 and buying overtakes it in year 10.
Frequently Asked Questions
Why isn't this just "mortgage payment vs rent"?
A mortgage payment includes principal, which isn't a cost -- it's forced savings that comes back to you as equity. This calculator uses a net-cost method instead: it adds up interest, property tax, insurance, maintenance, HOA, and closing and selling costs, then subtracts the home's value (net of the loan balance) at the end. On the rent side, it adds up rent paid and subtracts what your down payment and closing costs would have grown to if invested instead. On the default numbers here -- a $450,000 home, 20% down, a 6.5% rate -- renting is actually $20,256 cheaper over 7 years, even though the mortgage payment itself is close to the rent.
What is the break-even year?
The year buying's net cost drops to or below renting's. At the default numbers it's year 10: before that, the renter's invested down payment is still ahead; after it, the home's built-up equity and slower-growing carrying costs pull buying into the lead. Move the "years you'll stay" slider past that point and the verdict flips.
Does this account for the mortgage interest tax deduction?
Only if you check "I itemize deductions." Since the 2017 tax law nearly doubled the standard deduction, most homeowners no longer itemize, and get no tax benefit from mortgage interest at all -- the calculator assumes the standard deduction by default. If you do itemize, checking the box applies your marginal rate to the interest portion of each year's payment.
Why does a higher investment return make renting look better?
Because the down payment and closing costs you'd put into a home purchase don't disappear if you rent instead -- this calculator assumes you invest them. At a 6% return, a $101,250 upfront cost (20% down plus closing on a $450,000 home) compounds fast. If you'd otherwise leave that money in a low-yield savings account, lower the investment-return input to match, and buying looks better sooner.
What's not included?
Renter's insurance, the psychological value of not moving, remodeling costs, and any income from renting out a room or ADU. It also assumes you sell at the end of the horizon; if you plan to keep the home and never sell, the selling-cost input stops mattering and buying's real cost is lower than shown.
Why did my break-even year change when I only moved the appreciation slider?
Appreciation is the single biggest lever on the buying side's ending equity, so it also has the biggest effect on when buying overtakes renting. A market that appreciates 5%/year instead of 3.5%/year can move the break-even year earlier by several years on the same home price and rate.
SidebySideCalc calculators apply standard, published formulas -- loan amortization, future-value-of-annuity, and deductible/coinsurance cost-sharing math -- to the numbers you enter. They are estimates for comparing two paths, not tax, legal, or financial advice: your lender, plan documents, and a tax professional decide the real figures for your situation.