Finance

Rent vs Buy Calculator — Free 2026

Compare the total cost of renting versus buying a home. See your break-even year, equity built, and get a clear recommendation — free, instant, no sign-up.

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Rent vs Buy Comparison

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Total Rent Cost
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Total Buy Cost
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Equity Built
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Break-Even Year
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Recommendation

How It Works

  1. Enter home purchase details
  2. Enter rental details
  3. Compare results
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Rent or Buy: Making the Right Decision

The question of whether to rent or buy a home is one of the largest financial decisions most people face. Both options have advantages, and the right choice depends on your financial situation, local housing market, career stability, and how long you plan to stay in one place. This calculator helps you compare the total financial impact of both paths so you can make an informed decision based on numbers rather than assumptions.

The True Cost of Buying

Buying a home involves more than just the mortgage payment. Property taxes typically run 1 to 2 percent of home value annually. Homeowner's insurance, maintenance, and repairs add another 1 to 2 percent. If your down payment is less than 20 percent, you will also pay private mortgage insurance (PMI). Closing costs at purchase usually add 2 to 5 percent of the home price. On the positive side, your monthly mortgage payment builds equity over time, and home values generally appreciate. This calculator accounts for mortgage principal and interest payments, compares them against rising rent, and estimates the equity you build over your chosen time horizon. For a detailed mortgage breakdown, try our mortgage calculator.

The Case for Renting

Renting offers flexibility, lower upfront costs, and freedom from maintenance responsibility. Renters can move easily for job opportunities, and their monthly housing costs are predictable for the duration of each lease. However, rent typically increases each year, and renters do not build equity. Over a long enough period, cumulative rent payments often exceed the net cost of buying when equity is factored in. The break-even point — the year when buying becomes financially advantageous over renting — varies widely by market. In affordable cities, it may be as short as two to three years; in expensive metros, it can stretch to eight years or more. To explore how your savings grow while renting, check out our compound interest calculator.

For informational purposes only. Consult a qualified professional before making financial or medical decisions.

Frequently Asked Questions

Is it cheaper to rent or buy a home?
It depends on local market conditions, how long you plan to stay, mortgage rates, and your personal financial situation. In general, buying becomes cheaper than renting after 5-7 years due to equity building and fixed mortgage payments. In expensive cities with high price-to-rent ratios, renting may be more cost-effective for longer periods.
What is the break-even point for buying vs renting?
The break-even point is the year when the cumulative cost of buying (including mortgage, taxes, insurance, and maintenance minus equity built) becomes less than the cumulative cost of renting. This typically falls between 3 and 8 years depending on home price, down payment, mortgage rate, and annual rent increases.
How much equity do I build when buying a home?
Equity builds in two ways: through your mortgage principal payments and through home price appreciation. Each monthly mortgage payment includes a portion that goes toward principal (building equity) and a portion toward interest. Over time, the principal portion grows. If home values appreciate, your equity increases further. On average, US home prices have historically appreciated around 3-4% annually.
What costs are included in buying a home beyond the mortgage?
Beyond the monthly mortgage payment, homeowners pay property taxes (typically 1-2% of home value annually), homeowner's insurance, private mortgage insurance (PMI) if the down payment is under 20%, maintenance and repairs (budget 1-2% of home value annually), HOA fees if applicable, and closing costs at purchase (2-5% of the home price). These hidden costs significantly increase the true cost of homeownership.

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