Buying Renting Calculator

Display currencyFormatting only. This does not change the calculation.

Purchase price

Down payment (%)Below 20% adds PMI at the rate below.

Mortgage rate (APR) (%)

Mortgage term (years)The comparison runs for the whole term.

How long you expect to stay (years)The wealth gap is reported at this year. The break-even year is not "the year you should sell".

Buyer closing costs (%)Percent of the purchase price, paid in cash at purchase. CFPB: typically 2% to 5%.

Selling costs (%)Percent of the sale value (agent commissions and fees). 6% is a convention; commissions are negotiable.

Property tax rate (% of value a year)Illustrative default; look up your effective rate.

Homeowner's insurance (currency a year)Fixed in dollars; does not escalate.

Maintenance (% of value a year)The 1% rule is a convention; academic user-cost studies use 2.5% for maintenance plus depreciation.

HOA or condo fees (currency a year)

Home price appreciation (% a year)Nominal. FHFA all-transactions index averaged 4.2% a year 1991-2026; 3% is conservative.

Rent for a comparable home (currency a month)

Rent growth (% a year)Steps once a year on the anniversary. CPI rent averaged 3.9% a year 2013-2023.

Renter's insurance (currency a year)

Return on the renter's investments (% a year)Nominal, compounded monthly. Set to 0 only deliberately: it assumes the down payment would earn nothing.

PMI rate (if down payment under 20%) (% of loan a year)Charged while the scheduled balance exceeds 80% of the price (CFPB cancellation rule). 0.5% is a typical figure, not a sourced constant.

Count the federal tax benefit of itemising

Filing status (sets the 2026 standard deduction)

Marginal federal tax rate (%)

State and local income tax paid (currency a year)Shares the SALT cap with property tax.

Other itemised deductions (currency a year)Charitable gifts and the like.

SALT deduction cap 2026: $40,400 ($20,200 married filing separately), phased down above $505,000 of income to a $10,000 floor. Enter your own figure if it applies.

Mortgage interest deduction debt limit IRS Pub 936: $750,000 for debt after 15 Dec 2017 ($375,000 married filing separately). Interest is scaled down when the loan exceeds it.

Break-even

Year 15

Rent vs Buy Calculator

Break-even year

Owner wealth at your holding period (net sale proceeds)

912,650.69

Renter wealth at your holding period (investment fund)

659,261.45

Owner minus renter at your holding period

253,389.24

Monthly mortgage payment (principal and interest)

2,022.62

Loan amount

320,000.00

Renter's starting fund (down payment plus closing costs)

92,000.00

First-year owner cash outlay

34,171.41

First-year rent

24,000.00

First-year owner outlay minus rent

10,171.41

Months of PMI

Method B: annual user cost of owning

22,700.00

Method B: user cost a month

1,891.67

Method B reading

Owning costs 1891.67 a month in steady state against 2000.00 rent: cheaper per year, before transaction costs.

Worked out from IRS Publication 936 (2025), Home Mortgage Interest Deduction - $750,000 acquisition-debt limit; mortgage-insurance premium deduction expired and 8 other sources.

All figures are nominal and depend on the appreciation, rent-growth and investment-return assumptions; a one-point change in appreciation moves the break-even by years.

Owner wealth is net sale proceeds after selling costs and loan payoff: it is only realisable by selling. Capital-gains tax is ignored (the $250,000/$500,000 home-sale exclusion usually covers it).

Insurance and HOA fees are fixed in today's dollars and do not escalate.

How this is worked out

9 steps

Loan = 400000.00 × (1 - 20%) = 320000.00; monthly rate 6.5%/12; payment = 2022.62 (carried unrounded).
Renter's fund starts with the down payment plus closing costs: 80000.00 + 12000.00 = 92000.00.
Year 1 owner outlay = 12 × 2022.62 + property tax 4400.00 + insurance 1500.00 + maintenance 4000.00 + HOA 0.00 + PMI 0.00 - tax benefit 0.00 = 34171.41.
Year 1 rent = 12 × 2000.00 + renter's insurance 0.00 = 24000.00; the difference 10171.41 is invested a twelfth at a time at the end of each month at 5%/12.
End of year 1: home 412000.00 - balance 316423.28 - selling costs 24720.00 = owner wealth 70856.72; renter fund 107114.67.
Repeat for each year: value and rent step once a year, tax and maintenance use the start-of-year value, PMI stops once the scheduled balance is at or below 80% of the price (0 months charged).
Owner wealth first meets renter wealth in year 15: 353606.50 vs 349300.74 (year 14: 327680.55 vs 330182.42).
At your 30-year holding period: owner 912650.69, renter 659261.45, difference 253389.24.
Method B user cost = price × [(1 - LTV) × 5% + LTV × 6.5% + tax 1.1% + maintenance/insurance/HOA 1.375% - appreciation 3%] = 22700.00 a year, 1891.67 a month vs rent 2000.00.

Year-by-year comparisontable

year	homeValue	loanBalance	interest	principal	propertyTax	insurance	maintenance	opportunityCost	costOfOwning	rentPaid	ownerOutlay	outlayDifference	ownerWealth	renterWealth	wealthDifference
1	412,000	316,423.28	20,694.69	3,576.72	4,400	1,500	4,000	4,000	34,594.69	24,000	34,171.41	10,171.41	70,856.72	107,114.67	-36,257.95
2	424,360	312,607.02	20,455.15	3,816.26	4,532	1,500	4,120	4,778.84	35,385.99	24,720	34,423.41	9,703.41	86,291.38	122,523.76	-36,232.38
3	437,090.8	308,535.17	20,199.57	4,071.84	4,667.96	1,500	4,243.6	5,587.65	36,198.78	25,461.6	34,682.97	9,221.37	102,330.18	138,227.96	-35,897.79
4	450,203.52	304,190.63	19,926.87	4,344.54	4,808	1,500	4,370.91	6,427.78	37,033.56	26,225.45	34,950.32	8,724.87	119,000.68	154,227.59	-35,226.91
5	463,709.63	299,555.13	19,635.91	4,635.5	4,952.24	1,500	4,502.04	7,300.64	37,890.83	27,012.21	35,225.69	8,213.47	136,331.92	170,522.5	-34,190.58
6	477,620.92	294,609.18	19,325.46	4,945.95	5,100.81	1,500	4,637.1	8,207.73	38,771.09	27,822.58	35,509.31	7,686.74	154,354.49	187,112.12	-32,757.63
7	491,949.55	289,331.98	18,994.22	5,277.19	5,253.83	1,500	4,776.21	9,150.59	39,674.85	28,657.26	35,801.45	7,144.2	173,100.59	203,995.34	-30,894.75
8	506,708.03	283,701.37	18,640.8	5,630.62	5,411.45	1,500	4,919.5	10,130.88	40,602.62	29,516.97	36,102.35	6,585.38	192,604.18	221,170.54	-28,566.36
9	521,909.27	277,693.66	18,263.7	6,007.71	5,573.79	1,500	5,067.08	11,150.33	41,554.91	30,402.48	36,412.28	6,009.8	212,901.06	238,635.5	-25,734.44
10	537,566.55	271,283.6	17,861.36	6,410.06	5,741	1,500	5,219.09	12,210.78	42,532.23	31,314.56	36,731.51	5,416.95	234,028.95	256,387.38	-22,358.42
11	553,693.55	264,444.26	17,432.06	6,839.35	5,913.23	1,500	5,375.67	13,314.15	43,535.11	32,253.99	37,060.31	4,806.32	256,027.68	274,422.65	-18,394.97
12	570,304.35	257,146.86	16,974.02	7,297.39	6,090.63	1,500	5,536.94	14,462.46	44,564.05	33,221.61	37,398.98	4,177.36	278,939.23	292,737.07	-13,797.84
13	587,413.49	249,360.75	16,485.3	7,786.11	6,273.35	1,500	5,703.04	15,657.87	45,619.57	34,218.26	37,747.8	3,529.54	302,807.93	311,325.61	-8,517.69
14	605,035.89	241,053.19	15,963.85	8,307.56	6,461.55	1,500	5,874.13	16,902.64	46,702.17	35,244.81	38,107.1	2,862.29	327,680.55	330,182.42	-2,501.87
15	623,186.97	232,189.25	15,407.48	8,863.94	6,655.39	1,500	6,050.36	18,199.14	47,812.37	36,302.15	38,477.17	2,175.01	353,606.5	349,300.74	4,305.76
16	641,882.58	222,731.68	14,813.84	9,457.57	6,855.06	1,500	6,231.87	19,549.89	48,950.65	37,391.22	38,858.34	1,467.12	380,637.94	368,672.84	11,965.1
17	661,139.05	212,640.72	14,180.45	10,090.96	7,060.71	1,500	6,418.83	20,957.54	50,117.53	38,512.95	39,250.95	737.99	408,829.99	388,289.98	20,540.01
18	680,973.22	201,873.95	13,504.64	10,766.77	7,272.53	1,500	6,611.39	22,424.92	51,313.48	39,668.34	39,655.33	-13.01	438,240.88	408,142.32	30,098.56
19	701,402.42	190,386.11	12,783.57	11,487.84	7,490.71	1,500	6,809.73	23,954.96	52,538.97	40,858.39	40,071.85	-786.54	468,932.17	428,218.84	40,713.33
20	722,444.49	178,128.9	12,014.21	12,257.2	7,715.43	1,500	7,014.02	25,550.82	53,794.47	42,084.15	40,500.86	-1,583.28	500,968.92	448,507.25	52,461.67
21	744,117.83	165,050.81	11,193.32	13,078.09	7,946.89	1,500	7,224.44	27,215.78	55,080.43	43,346.67	40,942.75	-2,403.92	534,419.95	468,993.95	65,426
22	766,441.36	151,096.86	10,317.46	13,953.96	8,185.3	1,500	7,441.18	28,953.35	56,397.28	44,647.07	41,397.89	-3,249.18	569,358.02	489,663.88	79,694.15
23	789,434.6	136,208.38	9,382.93	14,888.48	8,430.85	1,500	7,664.41	30,767.23	57,745.43	45,986.48	41,866.68	-4,119.8	605,860.15	510,500.48	95,359.67
24	813,117.64	120,322.79	8,385.83	15,885.59	8,683.78	1,500	7,894.35	32,661.31	59,125.26	47,366.08	42,349.54	-5,016.54	644,007.79	531,485.54	112,522.25
25	837,511.17	103,373.32	7,321.94	16,949.47	8,944.29	1,500	8,131.18	34,639.74	60,537.15	48,787.06	42,846.88	-5,940.18	683,887.18	552,599.13	131,288.05
26	862,636.51	85,288.71	6,186.8	18,084.61	9,212.62	1,500	8,375.11	36,706.89	61,981.43	50,250.67	43,359.15	-6,891.52	725,589.61	573,819.48	151,770.13
27	888,515.6	65,992.94	4,975.64	19,295.77	9,489	1,500	8,626.37	38,867.39	63,458.4	51,758.19	43,886.78	-7,871.41	769,211.73	595,122.85	174,088.88
28	915,171.07	45,404.89	3,683.37	20,588.05	9,773.67	1,500	8,885.16	41,126.13	64,968.33	53,310.94	44,430.24	-8,880.7	814,855.92	616,483.4	198,372.52
29	942,626.2	23,438.03	2,304.55	21,966.86	10,066.88	1,500	9,151.71	43,488.31	66,511.45	54,910.26	44,990	-9,920.26	862,630.6	637,873.07	224,757.53
30	970,904.99	0	833.39	23,438.03	10,368.89	1,500	9,426.26	45,959.41	68,087.95	56,557.57	45,566.56	-10,991.01	912,650.69	659,261.45	253,389.24

Results are general information, not financial, tax, legal, medical or engineering advice.