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How to use the Rent vs Buy Calculator
- 1Enter the home price, down payment, mortgage rate and ownership costs.
- 2Enter your current rent and how fast rents rise.
- 3Set how long you'll stay and an investment return to compare net worth.
How the comparison works
Buying costs more than the mortgage payment: property tax, insurance, maintenance (around 1% of the home's value a year), HOA fees, and the costs of buying (about 3%) and selling (about 6%). In return, you build equity and benefit if the home's value rises.
Renting is cheaper upfront, and the calculator assumes the renter invests the down payment and any monthly savings. Whichever path leaves you with more net worth after the years you stay is the better deal financially.
Why time matters most
Buying and selling costs are high, so buying usually only wins if you stay long enough for equity and price growth to cover them, often five years or more. If you might move sooner, renting is usually cheaper.
Sources & review
Figures last checked in October 2026 against the official sources below. Month-by-month net worth of owning vs renting and investing the difference, including buying and selling costs.
- Tax Foundation: Property Taxes by State and County, 2026
- Consumer Financial Protection Bureau: Buying a house
Results are estimates for general information, not financial, tax or legal advice. How we check our tools
Frequently asked questions
Is it cheaper to rent or buy?
In the first few years renting is usually cheaper because of buying costs and mostly-interest mortgage payments. Over longer periods buying often wins, depending on prices, rents, interest rates and how well the renter invests.
What is the price-to-rent ratio?
The home price divided by a year's rent for a similar home. Above about 20, renting often makes more sense; below about 15, buying tends to be better value.
Does the calculator include tax deductions?
No. Since the standard deduction is large, most homeowners don't itemize mortgage interest, so the effect is often small; it is left out to keep the comparison simple.