Is it always better to buy than rent?

No. Buying is better in the long run in many markets, but only if you stay long enough to recoup transaction costs (typically 5–7 years). Renting is often financially superior for shorter stays, high-price markets, or when investment returns exceed home appreciation.

What is the break-even point for buying vs. renting?

The break-even is the year when the total cost of owning (including transaction costs, maintenance, and taxes) equals what you would have paid renting and investing the difference. This calculator shows that crossover year for your specific inputs.

What hidden costs should I include when buying a home?

Beyond the mortgage, include property taxes (0.5–2.5% of value per year), homeowner's insurance (~0.5–1%), maintenance and repairs (1–2% annually), and transaction costs (closing costs of 2–5% plus agent fees of 5–6% when selling).

How does home price appreciation affect the comparison?

Even modest appreciation (3–4%/year) significantly favors buying over long timelines. However, if you could instead invest your down payment and monthly savings difference in the stock market at 7–10%, renting can sometimes come out ahead.

Rent vs Buy Calculator

Compare the true long-run cost of renting versus buying a home. See when — or if — buying overtakes renting in net worth, accounting for equity, appreciation, taxes, and investing the down payment.

Buy wins after 30 years

$57,392

Buying leaves you $1,491,074 in net worth vs. $1,433,682 renting.

Buy net worth (end)

$1,491,074

Rent net worth (end)

$1,433,682

Break-even for buying

0mo

Buy net worth (home equity)Rent net worth (invested portfolio)

Rent vs. buy: it depends on the timeline

The rent-vs-buy question can't be answered with a simple "buying is always better" or "renting is always better." The right answer depends on where you live, how long you plan to stay, your lifestyle preferences, and the specific numbers of interest rates, home prices, and rents in your market.

The key insight is the break-even point: buying usually costs more in the early years because of transaction costs (closing costs, agent fees, inspection) and because the first years of a mortgage are mostly interest. But over time, home appreciation and equity build up. The break-even year is when buying's net worth overtakes renting's net worth. In many markets, this happens between years 5 and 8 — but if you move before that point, renting was cheaper.

Why it matters to your money

For most people, their home is their largest asset and their largest expense. Getting this decision wrong — buying in a market where you'll move in 3 years, or renting in a high-price market where you'll stay for 30 — can cost tens of thousands of dollars. This calculator helps you see the long-run numbers for your specific situation.

Read the full explainer on renting vs. buying for a detailed analysis of hidden costs, tax implications, and lifestyle factors that numbers alone can't capture.

Rules of thumb

Stay at least 5–7 years: Transaction costs for buying and selling (closing costs, agent fees, moving) typically total 5–7% of the home price. If you move sooner, renting is usually cheaper.
High-price markets (SF, NYC, LA): Renting is often the better financial decision because home prices are so high relative to rents. The price-to-rent ratio is the key metric.
Home appreciation is not guaranteed: Historical appreciation averages 3–4% per year, but individual markets can stagnate or decline. Don't assume your home will always go up.

Frequently asked questions

Is it always better to buy than rent?: No. Buying is better in the long run in many markets, but only if you stay long enough to recoup transaction costs (typically 5–7 years). Renting is often financially superior for shorter stays, high-price markets, or when investment returns exceed home appreciation.
What is the break-even point for buying vs. renting?: The break-even is the year when the total cost of owning (including transaction costs, maintenance, and taxes) equals what you would have paid renting and investing the difference. This calculator shows that crossover year for your specific inputs.
What hidden costs should I include when buying a home?: Beyond the mortgage, include property taxes (0.5–2.5% of value per year), homeowner's insurance (~0.5–1%), maintenance and repairs (1–2% annually), and transaction costs (closing costs of 2–5% plus agent fees of 5–6% when selling).
How does home price appreciation affect the comparison?: Even modest appreciation (3–4%/year) significantly favors buying over long timelines. However, if you could instead invest your down payment and monthly savings difference in the stock market at 7–10%, renting can sometimes come out ahead.