Rent vs Buy Calculator
Compare the long-term financial costs of renting and buying a home.
Buying a Home
Renting a Home
Shared Assumptions
The Verdict
Your Break-Even Point Is
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Total Cost of Buying
$0
Total Cost of Renting
$0
Renting vs Buying: A Complete Financial Breakdown
More Than Just a Monthly Payment
The decision to rent or buy is one of the biggest financial choices you’ll ever make. While it’s tempting to simply compare a monthly rent payment to a monthly mortgage payment, the true calculation is much more complex. Our Rent vs Buy Calculator is designed to account for all the hidden costs and benefits of both options to give you a clear, data-driven answer.
The Hidden Costs of Homeownership
A mortgage payment (principal and interest) is just the beginning. Our calculator helps you factor in the other major expenses:
- Property Taxes: An ongoing cost paid to your local government.
- Homeowner’s Insurance: Required by lenders to protect the property.
- Maintenance & Repairs: A general rule is to budget 1% of your home’s value each year for upkeep.
- Closing Costs: One-time fees paid when you buy the home, typically 2-5% of the purchase price.
The Financial “X-Factor”: The Break-Even Point
The most important number generated by this Rent vs Buy Calculator is the break-even point. This is the point in time (in years) where the total costs of buying become equal to the total costs of renting. After this point, buying becomes the financially superior option, largely due to building equity through appreciation and principal payments. If you plan to move before you reach the break-even point, renting is often the cheaper choice.