Money & Finance
Rent vs Buy Calculator
Find the year buying a home starts beating renting, with the true monthly cost laid bare.
How it works
Behind the numbers
Most rent-versus-buy math compares the wrong numbers: principal and interest against rent, while the real monthly cost of owning runs hundreds higher. A BuyVsRentPro analysis of mainstream calculators (January 2026) found they understate the monthly cost of buying by $700 to $800, mostly by leaving out PMI, surging homeowners insurance, and property tax. This calculator itemizes all of them, so the true-monthly-cost line is the number you would actually pay.
The breakeven horizon is the first year the total cost of buying drops below the total cost of renting. Buying’s total counts the down payment, closing costs, and every year’s outlays, minus the equity built (home value less the remaining loan and selling costs), plus opportunity cost — what the down payment and closing costs could have earned invested at your assumed return. Renting’s total is cumulative rent, grown each year.
The assumptions that move the answer most are home price appreciation, rent growth, and investment return, so adjust those first. PMI is held flat across the horizon; in practice lenders often drop it once you reach 20% equity, so long-horizon PMI reads conservative. This is a planning estimate, not financial advice.
FAQ
Questions, answered
Why do most rent vs buy calculators underestimate buying costs?
They tend to show principal and interest only. A BuyVsRentPro analysis (January 2026) found mainstream tools understate the monthly cost of owning by $700 to $800 by omitting PMI, homeowners insurance — which has surged in many states — and property tax. This calculator lists each of those as an explicit input.
What is the breakeven horizon?
The first year the all-in cost of buying (down payment, closing costs, yearly outlays, minus equity built, plus the opportunity cost of the down payment and closing costs) drops below cumulative rent. Before that year, renting is cheaper on paper; after it, buying pulls ahead.
How is PMI handled here?
PMI is an explicit yearly input, typically 0.5% to 1% of the loan per year when the down payment is under 20%. It is held flat across the horizon in this model; in practice lenders often remove it once you reach 20% equity, so check your loan terms.
Which assumptions should I change first?
Home price appreciation, annual rent growth, and investment return move the breakeven year the most. Small changes there swing the answer by years, while closing-cost tweaks barely register — so spend your attention on the big three.
Are selling costs included?
Yes. The selling-cost percentage (6% by default, covering agent commission and fees) is deducted from your equity in every year’s comparison, because you only realize the equity if you sell.