Buying usually beats renting only if you stay long enough to cover the costs of buying and selling.
With the calculator’s default numbers, a $400,000 home with 20% down at a 7.24% mortgage rate against $2,100 rent, renting comes out ahead by $46,719 after 7 years, and buying pulls ahead in year 22. Change the numbers to see your own break-even point.
AdvertisementUse the free calculator below to compare the full cost of renting and buying, including property tax, insurance, upkeep, closing and selling costs, and what you could earn by investing the money you do not spend on the home.
Rent vs Buy Calculator
Buying
The purchase price of the home you would buy.
Cash you pay up front, as a dollar amount or a percent of the price. Type in either box and the other updates.
The yearly interest rate on the mortgage. Use a lender’s quote if you have one.
Freddie Mac 30-year average, Oct 29, 2026
How many years the mortgage runs. Shorter terms have higher payments.
Yearly property tax as a percent of the home’s value. Your county assessor can tell you the rate.
Use your county’s rate
Your yearly homeowners insurance premium in dollars.
NerdWallet 2026 national average
Monthly homeowners association dues in dollars. Leave 0 if none.
Private mortgage insurance, as a percent of the loan per year. It is added only while your down payment is under 20% and your loan is above 80% of the original price.
Used only if down payment is under 20%
Yearly upkeep and repairs as a percent of the home’s value. Many owners budget around 1%, but it varies by home.
One-time closing costs when you buy, as a percent of the price. Ask a lender for a Loan Estimate.
Costs when you sell, such as agent fees and closing costs, as a percent of the sale price.
Renting
What you would pay each month to rent a similar home.
Zillow typical U.S. rent: $1,932 (Sept 2026)
Assumptions (not forecasts)
How much you expect the home’s value to rise each year. This is an assumption, not a forecast. Test a low number too.
FHFA: 2.1% over the past year
How much rent, insurance and HOA dues rise each year, as a percent.
Zillow: rents up 2.7% over the past year
The yearly return you assume on money you invest instead of spending it on the home, such as the down payment. This is an assumption, not a promise.
On money not spent on the home
How many years you expect to stay before you sell or move. The result is shown for this length of time.
1 to 30 years
Your inputs
| Home price | $400,000 |
| Down payment | $80,000 (20%) |
| Mortgage rate | 7.24% |
| Mortgage term | 30 years |
| Property tax rate | 1.0% |
| Homeowners insurance | $2,490 a year |
| HOA dues | $0 a month |
| PMI rate | 0.5% |
| Maintenance | 1.0% a year |
| Buying costs | 3.0% |
| Selling costs | 6.0% |
| Monthly rent | $2,100 |
| Home value growth | 3.0% a year |
| Yearly rise in rent and costs | 3.0% |
| Investment return | 5.0% a year |
| Time you will stay | 7 years |
Result
Renting comes out ahead by $46,719
Over 7 years. Buying pulls ahead in year 22.
Net worth at the end
| If you buy (home equity after selling plus savings) | $169,689 |
| If you rent (invested savings) | $216,408 |
The home at the end
| Home value | $491,950 |
| Loan balance | — |
| Selling costs | — |
First month
| Cost of owning (loan, tax, insurance, HOA, upkeep, PMI) | $3,055 |
| Rent | $2,100 |
This is an estimate based on your assumptions, not a forecast. It ignores income tax effects, and renters insurance and moving costs.
To save your estimate: press Ctrl+P (Windows) or Cmd+P (Mac) and choose Save as PDF. Only the results print.
Rent vs Buy Decision Checklist
Tick each item as you finish. You are ready to decide when the counter reaches 10.
How the Calculator Compares Renting and Buying
- It tracks the owner’s cost. Each month it adds mortgage payment, property tax, insurance, HOA dues, upkeep and PMI while it applies.
- It tracks the renter’s cost. Rent rises each year by the percent you enter.
- It invests the difference. The renter invests the down payment and closing costs at the start, plus any month when owning costs more than renting. If owning costs less, the owner invests the difference.
- It compares net worth. For the owner, that is the home’s value minus selling costs and the loan balance, plus savings. For the renter, it is the invested savings. The calculator also shows the year buying pulls ahead.
It ignores income tax effects, renters insurance and moving costs, so treat the result as a guide.
How Rent and Home Growth Change Your Break-Even Year
This chart uses the default home price, down payment, 7.24% rate and costs. “30+” means buying does not pull ahead within 30 years.
| Monthly rent | Home value growth 2% | Home value growth 3% | Home value growth 4% |
|---|---|---|---|
| $1,800 | 30+ | 30+ | 30+ |
| $2,100 | 30+ | 22 | 11 |
| $2,500 | 13 | 8 | 5 |
| $3,000 | 5 | 4 | 3 |
How the Mortgage Rate Changes It
This chart uses 3% home value growth and the other default numbers.
| Mortgage rate | Break-even year at $2,100 rent | Break-even year at $2,500 rent |
|---|---|---|
| 5.5% | 8 | 4 |
| 6.5% | 14 | 6 |
| 7.24% | 22 | 8 |
Current U.S. Housing Numbers
- Mortgage rates: Freddie Mac’s survey showed a 30-year fixed average of 7.24% and a 15-year average of 6.60% on October 29, 2026.
- Home prices: NAR reported a median existing-home price of $417,500 for September 2026, up 1.3% from a year earlier. Zillow’s typical home value was $366,913, up 1%. FHFA reported U.S. house prices up 2.1% from Q2 2025 to Q2 2026.
- Rents: Zillow’s typical U.S. rent was $1,932 in September 2026, up 2.7% from a year earlier.
National numbers hide big differences between cities, so use rent and prices for homes in your area.
Rent vs Buy: What the Numbers Do Not Show
- Flexibility. Renting makes it easier to move for a job or a life change.
- Stability. A fixed-rate mortgage keeps your principal and interest steady, while rent can rise.
- Control. Owners can renovate, and they also handle every repair.
- Risk. Home values can fall, and investments can too.
Ways to Tip the Math Toward Buying
- Plan to stay longer. More years spread the closing and selling costs.
- Shop for a lower rate. Compare Loan Estimates from at least three lenders.
- Put 20% down to avoid PMI, if it fits your savings.
- Buy where rents are high compared with prices. A lower price-to-rent ratio favors buying.
- Lower your housing costs. Look at taxes, insurance and HOA dues, not only the price.
Mistakes to Avoid
- Comparing the mortgage payment with rent only. Owners also pay tax, insurance and upkeep.
- Ignoring selling costs. They are paid when you sell, so short stays lose money.
- Assuming prices always rise. Test a low growth rate.
- Forgetting the down payment’s other use. That cash could be invested instead.
- Stretching your budget. Keep an emergency fund after you buy.
Frequently Asked Questions
Is it better to rent or buy a house?
It depends on how long you will stay, the mortgage rate, the price-to-rent ratio and how fast home values rise. Buying usually needs several years to cover closing and selling costs. Use the calculator to find your break-even year.
How long do you have to stay for buying to beat renting?
The calculator shows your break-even year. With its default numbers ($400,000 home, 20% down, 7.24% rate, $2,100 rent) buying pulls ahead in year 22, while at $2,500 rent it pulls ahead sooner. Your result will differ.
What is the price-to-rent ratio?
It is the home price divided by a year of rent for a similar home. A higher ratio generally favors renting. Zillow’s September 2026 figures, a typical home value of $366,913 and a typical rent of $1,932, imply a ratio of about 15.8.
What costs does renting vs buying include?
For buying: mortgage principal and interest, property tax, insurance, HOA dues, upkeep, PMI if the down payment is under 20%, plus buying and selling costs. For renting: monthly rent that rises each year. The calculator also tracks the savings each side could invest.
Does the calculator include taxes?
It includes property tax, but it ignores income tax effects such as the mortgage interest deduction, the home sale exclusion and taxes on investment gains. Many people take the standard deduction, so the interest deduction may not apply. Ask a tax professional about your case.
What home value growth should I assume?
Use a modest number and test a low one. FHFA reported U.S. house prices up 2.1% from Q2 2025 to Q2 2026, and NAR reported a 1.3% rise in the September 2026 median existing-home price. Local markets differ, and future growth is not guaranteed.
What investment return should I assume?
The calculator assumes you invest the money you do not spend on the home, such as the down payment. The default of 5% a year is an assumption, not a promise. Test a lower and a higher number.
Why does renting win in the first few years?
Buying has large up-front costs, such as closing costs, and selling costs at the end, and early mortgage payments are mostly interest. It usually takes time for home value growth and loan payoff to catch up.
What if I buy and then move after a few years?
Selling costs, often several percent of the price, can wipe out early equity. That is why the time you will stay is one of the most important inputs.
Is this a recommendation to rent or buy?
No. It is an estimate from your assumptions, not a forecast or financial advice. Personal factors, such as stability, job plans and how you value ownership, also matter.
Conclusion
Renting or buying is not one right answer for everyone. It depends on how long you will stay, your local rents and prices, and your mortgage rate. Enter your numbers, check the break-even year, and test low and high assumptions before you decide.
Related Reading
- Mortgage calculator with taxes and insurance
- How much house can I afford calculator
- Salary calculator
- Hourly to salary calculator
Sources: Freddie Mac, Primary Mortgage Market Survey; National Association of Realtors, Existing-home sales, September 2026; Zillow, September 2026 Market Report; FHFA, House Price Index, Q2 2026; NerdWallet, Average Home Insurance Cost. Estimates only, not financial advice.