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Rent vs Buy Calculator 2026 — Which Costs You Less?
Rent feels cheaper month to month, but buying builds equity while rent buys nothing. The honest answer depends on how long you stay. Enter your numbers and see the true total cost of each path — and the year buying pulls ahead.
Compare Renting vs Buying
This is the single biggest factor. Buying usually loses in the first few years and wins later.
The common rule of thumb is 1% of the home’s value per year.
Agent commissions and seller closing costs typically run about 6%.
| Cost over your stay | Amount |
|---|---|
| Total cost of buying (after equity recovered) | |
| Total cost of renting | |
| Difference | |
| Break-even year (buying becomes cheaper) |
How the Comparison Works
Most rent-vs-buy comparisons cheat: they compare a rent check against a mortgage payment and stop there. That ignores the down payment, closing costs, property taxes, maintenance, the cost of selling — and the equity a buyer gets back at the end. This calculator counts everything, on both sides.
Cost of buying = down payment + closing costs + all mortgage, tax, insurance, maintenance, and HOA payments + selling costs − what you walk away with after selling and paying off the loan
Cost of renting = every rent payment over your stay (with yearly increases) + renter’s insurance
- Why the time horizon decides it: buying carries big one-time costs at both ends — roughly 2% to buy and 6% to sell. Spread over 2 years, those costs crush you. Spread over 10, the equity from payments and appreciation usually more than pays them back.
- Equity is not profit until you sell: the buying total credits you with the sale proceeds left after paying off the remaining loan balance and selling costs. That is real money — but only if the home actually appreciates at the rate you entered.
- With the defaults above — a $450,000 home, 20% down, 6.5% mortgage, $2,200 rent — buying costs $174,149 over 7 years against $203,549 for renting, so buying wins by $29,400. Change the stay to 3 years and renting wins by roughly $17,405. The break-even point is year 5.
- What this model leaves out: it does not invest the renter’s would-be down payment or the monthly difference, and it does not count mortgage interest or property tax deductions. Both can matter — a renter who invests the difference in a rising market can come out ahead even when this calculator favors buying.
Frequently Asked Questions
Typically about 5 years, because buying starts with roughly 2% in closing costs and ends with roughly 6% in selling costs. With this calculator’s defaults the break-even year is 5. In expensive, high-tax markets it can take 7 years or more; in cheap markets with high rents, as little as 3.
On the buying side: the down payment, closing costs, property tax, homeowner’s insurance, maintenance, HOA dues, selling costs, and the equity recovered when you sell. On the renting side: yearly rent increases and renter’s insurance. Comparing rent to a mortgage payment alone leaves out most of the real cost of owning.
It can. This calculator does not invest the renter’s down payment or monthly savings, so it does not show that scenario. If you would genuinely invest the full difference every month at solid returns, renting can win even past the break-even year — most people, though, do not invest the difference consistently.
The standard rule of thumb is 1% of the home’s value per year — $4,500 a year on a $450,000 home. Newer homes may run less; older homes, or homes in harsh climates, can run 2% or more. Renters never pay this directly, which is one reason renting looks cheaper in short stays.
US home prices have risen about 3–4% a year over long periods, so 3% is a reasonable default. Appreciation is the assumption with the biggest effect on the result — try 0% to see whether buying still wins without price growth before you rely on the answer.
Disclaimer: This calculator is an educational estimate, not financial advice. It assumes property tax and maintenance stay proportional to the original price, a constant appreciation rate, and no investment return on the renter’s savings; it does not include tax deductions, PMI, or local programs. Real outcomes vary — talk to a mortgage lender and a financial advisor before making a decision this size.
