Rent vs Buy Calculator
Should you rent or buy? Compare monthly rent against mortgage payments and homeownership costs to find the break-even point.
The rent vs. buy decision is one of the largest financial choices most people make. This calculator compares the true total cost of each option over a 5-year horizon — accounting for all the hidden costs of homeownership that are often overlooked.
Monthly cost of buying:
Monthly Mortgage (P&I) = P × [r(1+r)^n] / [(1+r)^n − 1]
Where P = loan amount, r = monthly interest rate, n = number of payments (months)
Additional monthly homeownership costs:
| Cost | Typical Amount |
|---|---|
| Property tax | 1.0–2.5% of value / 12 months |
| Homeowner’s insurance | 0.3–0.5% of value / 12 months |
| HOA fees (if applicable) | $100–$600/month |
| Maintenance & repairs | 0.5–1.5% of value / 12 months |
| PMI (if < 20% down) | 0.5–1.0% of loan / 12 months |
Monthly cost of renting:
- Monthly rent
- Renter’s insurance: typically $15–30/month
- No maintenance costs (landlord’s responsibility)
5-year total cost of buying:
Total = (Monthly PITI) × 60 + Transaction costs in − Equity built + Opportunity cost of down payment
Transaction costs — the hidden drag:
- Purchase costs: ~3–5% of purchase price (closing costs, inspection, title)
- Selling costs: 5–6% commission + ~1% closing costs on exit
- Total roundtrip: 8–11% of home value just in transaction friction
The break-even timeline: Most research places the rent-vs-buy break-even at 5–7 years in a typical market. Buying costs less in the long run — but only after you’ve been in the home long enough for equity and appreciation to overcome the high transaction costs.
Key variables that shift the calculation:
- Rent-to-price ratio: Annual rent / home price. Above 5% favors renting; below 3% strongly favors buying
- Mortgage rate: Each 1% increase in rate adds ~10% to monthly payment on a 30-year loan
- Home appreciation rate: Historically ~3–4%/year nationally (varies dramatically by metro)
- Investment return on down payment: If invested instead, a down payment earning 7%/year is a real opportunity cost of buying
- How long you plan to stay: The #1 factor — short stays almost always favor renting
This calculator uses your actual inputs to show the 5-year true cost of each path in your specific situation.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
SuperGlobalCalculator is independently built and maintained. See how we build and verify our calculators.