Rent vs. Buy Calculator
Renting isn't throwing money away, and buying isn't always building wealth. This compares both honestly — renting and investing the difference vs. buying and building equity — on your total net worth over time, and tells you the year buying pulls ahead (if it ever does).
Should you buy, or keep renting?
Four questions. Everything else we assume for you, and show you what we assumed.
$
$
In dollars — we'll work out the percentage.
$
Per month. This is what buying gets compared against.
The biggest single driver of the answer. Buying rarely wins if you move early.
Educational, not financial advice.
Assumptions used
Last updated May 24, 2026- Mortgage rate (default)Needs update - enter manuallyneeds updateNo approved current default
- Home appreciation (default)Needs update - enter manuallyneeds updateNo approved current default
- Rent growth (default)Needs update - enter manuallyneeds updateNo approved current default
- SALT deduction capBeing updatedIRS
These are starting defaults you can edit in the tool. They're reviewed and sourced — not personalized advice. Confirm anything that affects a real decision. Some values are being re-checked against their sources right now.
Who this is for
- You're deciding whether to keep renting or buy in the next year or two.
- You want the real number — net worth in both paths — not a gut feeling.
- You're weighing how long you'll stay against closing and selling costs.
How it works
- 1Enter your rent, a home you'd actually buy, and how long you plan to stay.
- 2We simulate month by month: the buyer builds equity; the renter invests the down payment, closing costs, and any monthly savings.
- 3You get both net-worth paths, the break-even year, and what would flip the answer.
Methodology
We run a monthly simulation over your horizon. The buy side accrues mortgage principal, appreciation, property tax, insurance, maintenance, and PMI where applicable, then nets selling costs at the end. The rent side invests every dollar the buyer fronted (down payment + closing costs) plus the monthly cash-flow difference whenever renting is cheaper, growing at your expected investment return. Defaults come from our reviewed assumption library and are fully editable — your inputs drive the result. Potential tax deductions are shown for reference only and are excluded from the headline net-worth comparison.
Example
On a $500k home with 20% down at today's rates vs. $2,400/mo rent, buying often trails for the first several years because of closing costs and early interest, then crosses ahead once equity and appreciation compound — typically somewhere between years 5 and 9 depending on appreciation and how long you stay. The tool shows your exact crossover.
FAQ
- Is renting really throwing money away?
- No. Renters can invest what they'd have spent on a down payment, closing costs, maintenance, and property tax. Whether buying wins depends on how long you stay, your rate, and appreciation — which is exactly what this compares.
- What's the most important input?
- How long you plan to stay. Buying has big up-front costs (closing) and back-end costs (selling), so the longer you hold, the more buying tends to win.
- Does this account for the mortgage interest deduction?
- No. Potential tax benefits are shown as reference information but are excluded from the headline net-worth result because deductions vary by filing situation and current law.
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