See whether renting or buying builds more wealth in today's money — including the year buying pulls ahead and the opportunity cost of investing your down payment instead.
Up front, your $60,000 down payment goes to work either way — renting invests it as a lump sum, buying puts it into the home.
You spend the same total each month — the cheaper option invests the difference shown above. Property tax, transaction costs and investment tax are optional (see Advanced).
Your result
Buying pulls ahead in year 1 — within your 10-year stay.
You'd be $41,163 richer buying, in today's money.
Price-to-rent ratio: 14.7
All figures in today's money
Every number below is inflation-adjusted to today's purchasing power, so renting and buying are compared on equal footing.
The link encodes your inputs only — nothing is stored on our servers.
Both lines start at your down payment and show net worth while you hold — the buyer's home equity plus side investments, and the renter's portfolio. Selling, closing and tax costs (when enabled) are applied to the result table below, not to the lines.
Your numbers over the 10-year horizon, in today's money.
| Metric | Buying | Renting + investing |
|---|---|---|
| Upfront cost | $60,000 | — |
| Total payments | $203,807 | $210,968 |
| Value at the end | $177,897 | $136,734 |
| Net worth at year 10 | $177,897 | $136,734 |
Four short steps, no signup required. Defaults already represent a realistic 2026 household, so you get a useful answer the moment the page loads.
Enter the home price and your rent
Fill in the purchase price of the home you'd buy and the monthly rent you'd pay instead. The calculator compares the two paths over the same horizon for a fair fight.
Set your down payment, mortgage rate, and costs
Enter your down payment, mortgage rate, closing costs, property tax, maintenance, and the costs of selling later. These are the real cost drivers most quick rules of thumb ignore.
Set growth and inflation assumptions
Choose expected home appreciation, rent growth, your investment return, and inflation. The calculator converts everything into today's money so the comparison stays honest over long horizons.
Read your breakeven year
See the year buying overtakes renting-and-investing in real net worth, plus the terminal equity of each path. Scroll down for the chart, the scoreboard, and the deep dive on when each choice wins.
Rules of thumb that hold up across most reasonable inputs. Use them as a sanity check on what the calculator tells you.
If you'll move within five years, lean toward renting. Closing costs of 3-10% to buy and 5-8% to sell rarely earn themselves back over a short stay, so a short horizon almost always favors renting and investing the difference.
Check the price-to-rent ratio first. Divide the home price by one year of rent: below 15 tends to favor buying, above 20 tends to favor renting. It's a 30-second filter before you run the full numbers.
Always invest the down payment in your renting scenario, at least on paper. Renting only wins if you actually invest the money you'd have tied up in a house — otherwise the comparison is dishonest and buying will usually look better than it is.
Stress-test your appreciation assumption. The result swings hard on expected home appreciation, the one input nobody can predict. Run a conservative case and an optimistic case; if both still favor the same choice, you can act with confidence.
Don't forget the unrecoverable costs of owning. Mortgage interest, property tax, maintenance, and insurance are spent money just like rent. A mortgage payment equal to your rent does not mean buying breaks even — the breakeven year usually comes years later.
Deeper guides on our blog that build on the topics in this tool.
How the two paths differ on the factors that actually move your net worth. Use it as a quick orientation before running your own numbers above.
| Cost driver | Renting | Buying |
|---|---|---|
| Upfront cost | Deposit only — typically 1-2 months' rent, fully refundable | Down payment plus 3-10% closing costs, none of it refundable |
| Monthly cost | Rent, rising with inflation over time | PITI — principal, interest, property tax, insurance — plus upkeep |
| Opportunity cost | None — down payment stays invested and compounding | High — capital is locked in equity, not the market |
| Flexibility | High — move with weeks' notice, no transaction costs | Low — selling costs 5-8% and takes months |
| Equity & appreciation | Builds wealth only if you invest the difference | Builds forced equity; gains depend on real appreciation |
| Maintenance & tax | Landlord's responsibility | Yours — roughly 1% of value per year each, plus repairs |
| Term | What it means |
|---|---|
| Breakeven year | The first year a buyer's net wealth (home equity minus selling costs) overtakes a renter's invested wealth. Before it, renting-and-investing is usually ahead. |
| Real (today's money) | A value after subtracting inflation, expressed in today's purchasing power — the honest yardstick for comparing rent and buy over long horizons. |
| Opportunity cost | The investment return you forgo by locking cash into a down payment instead of the market. The renter captures it; the buyer gives it up. |
| Price-to-rent ratio | Home price divided by one year of rent. Roughly: 15 or below favors buying, above 20 favors renting, with a gray zone in between. |
| Invest the difference | The renter's strategy of investing the down payment plus any month where renting costs less than owning, so the comparison is wealth-vs-wealth. |
| Terminal equity | Your wealth at the end of the comparison: the buyer's home value minus loan balance and selling costs, versus the renter's investment portfolio. |
| Closing costs | One-time fees to buy a home — typically 3% to 10% of price — that must be earned back through equity before buying breaks even. |
| PITI | Principal, Interest, Taxes, and Insurance — the full monthly cost of owning, which is what should be compared to rent, not the mortgage alone. |
Yes — renting wins more often than people assume. Renting is the better financial choice when you'll move within a few years, when home prices are high relative to rents, when mortgage rates are elevated, or when you reliably invest the money you'd otherwise tie up in a down payment. The decisive factor is rarely the monthly payment; it's how long you stay and what your invested down payment earns. Renting is not "throwing money away" if the alternative is locking cash into slow-appreciating equity.
The breakeven year is the first year your net wealth as a buyer — home equity minus selling costs — overtakes your net wealth as a renter who invested the down payment and any monthly savings. For most markets it lands somewhere between 5 and 10 years; across the US it commonly ranges from about 7 years in fast-appreciating regions to 12+ in slow ones. Before the breakeven year, renting and investing usually leaves you wealthier. This calculator shows your breakeven year in today's money, not nominal dollars.
Because nominal dollars flatter buying. Over a 10-to-30-year horizon, inflation inflates both home prices and rents, so a "big" nominal gain on a house can be a modest real gain once you subtract inflation. This tool expresses every result in today's purchasing power, so a dollar of home equity is compared fairly against a dollar of invested savings. Most rent vs buy calculators are US, nominal-dollar only — which is exactly why their breakeven years look shorter than the real-terms truth.
The opportunity cost is the investment return you give up by locking your down payment into a house instead of the market. A down payment invested at a 7% return roughly doubles over a decade — money the buyer never earns. Any honest rent vs buy comparison must credit the renter with this growth, plus the growth on every month renting is cheaper than owning. Ignoring it is the single most common reason calculators overstate the case for buying.
The 5% rule, popularized by Ben Felix, estimates the unrecoverable annual cost of owning at about 5% of the home's value — roughly 1% property tax, 1% maintenance, and 3% cost of capital. Multiply the home price by 5%, divide by 12, and compare to monthly rent: if rent is below that number, renting is likely cheaper; if it's above, buying likely wins. It's a fast sanity check, not a full model — it ignores appreciation, your actual mortgage rate, and your time horizon, which this calculator handles explicitly.
The price-to-rent ratio is the home price divided by one year of rent for a comparable property. As a rough guide, a ratio of 15 or below tends to favor buying, 15 to 20 is a gray zone that depends on your situation, and above 20 leans toward renting because homes are expensive relative to rents. It's simpler than the 5% rule but less precise because it ignores maintenance, taxes, and the opportunity cost of your capital. Use it as a first filter, then run your real numbers above.
Yes — and they matter more than most people expect. Buying typically costs 3% to 10% of the price in closing costs, and selling later costs another 5% to 8% in agent fees and transaction costs. Together these can erase several years of equity gains, which is the core reason a short stay favors renting. The calculator subtracts both so your breakeven year reflects the real round-trip cost of owning, not just the mortgage. These percentages and transfer taxes vary by market, so outside the US adjust the closing- and selling-cost inputs to match your country's rules.
Yes. Ongoing ownership costs — property tax, maintenance, insurance, and any HOA or building fees — are recurring drags that renting avoids, and they're built into the comparison. A common planning assumption is roughly 1% of home value per year each for property tax and maintenance, though both vary widely by country and property. These costs are why a mortgage payment equal to your rent does not mean buying breaks even immediately.
Buying clearly wins when you stay long enough to pass the breakeven year — usually well beyond five years — and the home appreciates at a healthy real rate. It also wins when rent is high relative to price (a low price-to-rent ratio), when your mortgage rate is low and fixed, and when forced principal payments act as a savings commitment you wouldn't otherwise make. The longer your horizon, the more buying's transaction costs are amortized and the stronger the case becomes.
Renting wins when your horizon is short, when prices are high relative to rents (a high price-to-rent ratio), when mortgage rates are elevated, or when you genuinely invest the down payment and monthly savings rather than spending them. It also wins on flexibility — no transaction costs to move, no maintenance risk, and full liquidity. The phrase "renting is throwing money away" ignores that a mortgage's early interest, property tax, maintenance, and transaction costs are also unrecoverable.
Enormously — home appreciation is the input the result is most sensitive to. A single percentage point of extra real appreciation can pull the breakeven year forward by several years; a flat or negative real market can push it past your likely stay entirely. Because no one can predict appreciation, the honest approach is to test a conservative case alongside an optimistic one. This calculator lets you adjust home appreciation and rent growth separately so you can see how fragile the answer is to that one guess.
Yes — the model is global and currency-agnostic. The math of rent vs buy is identical everywhere: compare buyer's terminal equity (after selling costs) against renter's invested wealth, in real terms. Switch the display currency to EUR, CZK, GBP, or USD and the calculator works the same way, which is the main thing US-only tools can't do. Only the country-specific tax rules differ — closing and transfer costs and capital-gains treatment vary by market — so localize the country-variable inputs and you can approximate those by adjusting the cost inputs.
It ignores jurisdiction-specific tax details — mortgage interest deductions, primary-residence capital gains exemptions, local transfer taxes, and rent subsidies — because these vary by country and change often. It also assumes steady appreciation, inflation, and returns rather than year-to-year volatility. Treat the breakeven year as a well-reasoned estimate to pressure-test, not a precise forecast, and adjust the cost inputs to approximate your local rules.
No — it's the most persistent myth in the debate. A renter's payment buys housing for the month; a buyer's payment also spends money that never comes back, including mortgage interest, property tax, maintenance, insurance, and the closing and selling costs of the round trip. In the early years of a mortgage, the majority of each payment is interest, not equity. The real question isn't "rent or own" — it's whether buying's net cost, after the opportunity cost of your down payment, beats renting and investing the difference.
This calculator is for educational use and assumes steady appreciation, rent growth, inflation, and investment returns rather than real-world volatility. Its defaults are global rules of thumb, and it does not model jurisdiction-specific tax rules — mortgage interest deductions, capital gains exemptions, and transfer taxes vary by country. Treat the breakeven year as a well-reasoned estimate to pressure-test, and run any major housing decision past a qualified financial advisor before acting on it.
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