Is it cheaper to rent or buy a house?

It depends on your local market, how long you plan to stay, and your financial situation. Buying tends to be cheaper in the long run if you stay 5+ years due to equity building and fixed mortgage payments. Renting can be cheaper in expensive markets, for short stays, or when you factor in opportunity costs of the down payment. This calculator compares the total cost of each path over your specific time horizon.

How long do you need to stay in a house for buying to make sense?

The typical break-even point is 3–7 years, depending on closing costs, appreciation rates, and local market conditions. Closing costs alone (2–5% of the purchase price on buying, plus 6–8% in agent commissions when selling) mean you need several years of appreciation and principal paydown just to break even compared to renting.

Home & Mortgage

Should You Rent or Buy a Home?

Compare the true financial cost of renting versus buying a home — including equity, appreciation, opportunity cost, and all the hidden expenses.

Current Monthly Payment

—

New Monthly Payment

—

Est. Interest Saved

—

Break-Even

—

Renting Details

Monthly Rent

How Long You Plan to Stay

Buying Details

Home Purchase Price

Down Payment

Mortgage Rate

30-yr avg: ~6.7% (Freddie Mac)

Down payment: $70,000 — monthly P&I: $1,770

Over 7 Years

$55,188

Buying costs less overall

Break-even

5years

buying starts costing less

Cumulative Cost Comparison

Compares total renting cost (including opportunity cost of down payment) against net buying cost over time. Where the lines cross is the break-even point.

Scenario & Renting

Time Horizon7 years

Market Scenario

Monthly Rent

Renter's Ins./mo

Annual Rent Increase

Security Deposit

Buying Costs

Home Price

Down Payment

Interest Rate

Loan Term

Home Appreciation

Down payment: $80,000

Ownership Costs

Property Tax

Home Ins./yr

HOA/mo

Maintenance

Closing Costs

Selling Costs

PMI Rate

Applies if down payment is under 20%

Investment & Tax

Investment Return

Tax Bracket

Filing Status

Buying Costs Less

$39,786

Net difference over 7 years, including opportunity cost and selling costs

Break-even

Year 6

Price-to-Rent Ratio

16.7— Gray Zone

<15 Buy15–20 Gray Zone>20 Rent

Home price ÷ annual rent. A ratio above 20 means you're paying a significant premium to own versus renting a comparable property — making the opportunity cost of buying harder to overcome.

Cost Comparison Over Time

Shows cumulative rent cost (including opportunity cost of down payment) against net buying cost over time. The equity area represents the wealth building inside the home.

Monthly Rent Costs (Year 1)

Rent$2,000

Insurance$25

Total$2,025

Monthly Buy Costs (Year 1)

P&I$2,076

Property Tax$367

Insurance$150

Maintenance$333

Total$2,926

Key Metrics After 7 Years

Metric	Rent	Buy
Upfront Costs	$4,000	$92,000
Monthly Payment (Year 1)	$2,025.00	$2,925.51
Total Rent/Mortgage Paid	$189,999	$174,343
Total Interest Paid	—	$144,863
Property Tax + Maintenance	—	$66,296
Home Equity Built	—	$201,430
Home Appreciation	—	$91,950
Est. Tax Savings	—	$17,901
Down Payment Opportunity Cost	$55,732	—
Price-to-Rent Ratio	16.7	16.7
Net Total Cost	$245,731	$205,945

About This Analysis

This calculator compares the estimated financial costs of renting versus buying over your chosen time horizon. It accounts for mortgage payments, property taxes, maintenance, insurance, closing and selling costs, home appreciation, equity building, opportunity cost of the down payment, and estimated tax benefits from itemizing. It does not account for all potential tax implications, emotional factors, local market conditions, or the value of flexibility and stability. Home appreciation, rent increases, and investment returns are estimates and may vary significantly. PMI is assumed to drop off once 20% equity is reached. Results are for informational and educational purposes only and should not be considered financial advice.

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Quick Reference

Insights

Renting vs. Buying: The Math Behind the Decision12 min read

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