Home Rent vs. Buy Calculator
Renting or buying? This compares the net cost of each over your time horizon, counting the equity and appreciation you gain by owning.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Home price
- $350,000
- Down payment
- 20%
- Mortgage rate
- 6.50%
- Mortgage term (years)
- 30
- Monthly rent
- $1,900
- Years you’ll stay
- 7
- Home appreciation / year
- 3%
- Tax, insurance & upkeep / year
- 2.50%
by $46,255
- Net cost of buying$128,449
- Total cost of renting$174,704
- Home value at end$430,456
How the cheaper over 7 years changes with home price
Holding the other inputs at the example above, here is how the result moves as home price changes.
| Home price | Cheaper over 7 years | Net cost of buying |
|---|---|---|
| $175,000 | Buying | $64,225 |
| $275,000 | Buying | $100,925 |
| $350,000 | Buying | $128,449 |
| $525,000 | Renting | $192,674 |
| $700,000 | Renting | $256,899 |
The math behind it
For buying, the calculator sums your down payment, all mortgage payments over your stay, and yearly ownership costs (a percentage of the price for taxes, insurance, and upkeep), then subtracts the equity you recover when you sell — the home's appreciated value minus the remaining loan balance and an assumed selling cost. For renting, it totals your rent over the same years with about 3% annual rent inflation. The lower net figure wins.
Assumptions & limits
- Home value grows at the appreciation rate you set, and rent rises about 3% a year. Both are assumptions, and results swing heavily with them.
- Selling costs are estimated at 6% of the home's value at the end of your stay.
- Ownership costs (tax, insurance, upkeep) are a single yearly percentage of the price. The mortgage-interest tax deduction is not modeled.
- It compares net cash cost. It does not account for the investment return you might earn by keeping your down payment invested instead of buying.
Source: Freddie Mac PMMS via FRED. Annual averages; latest weekly reading shown.
Common questions
Why does buying usually win only over longer stays?
Buying carries large upfront costs — down payment and closing costs — plus selling costs at the end. You need enough years of building equity and appreciation to offset those. Over a short stay, renting often wins because you avoid those transaction costs; the longer you stay, the more ownership pays off.
What assumptions move the result the most?
Home appreciation and rent inflation dominate. A higher appreciation rate makes buying look far better; faster rent growth does the same. Because these are estimates of the future, test a few scenarios rather than trusting a single result — the break-even can shift by years.
Does this account for the tax benefits of owning?
No. The mortgage-interest deduction is left out, partly because the larger standard deduction since 2018 means many homeowners no longer itemize and see no benefit. If you do itemize, owning could look somewhat cheaper than shown here.