Rent vs Buy Calculator

Appreciation and investment returns are assumptions. Tax deductions are not included.

Published by the Mortgage Guide editorial team. Rate assumptions and content updated October 2026. This page is educational. It is not a loan offer, approval, or personalized financial advice.

Appreciation, rent growth, investment return, maintenance, and selling costs are assumptions you can change. Tax deductions are not included.

Monthly rent

Rent growth per year

Home price

Down payment

Mortgage rate

Years you would stay

Home appreciation per year

Return if the down payment is invested

Annual property tax today

Annual insurance

Maintenance assumption

Percent of that year's assumed home value.

Selling-cost assumption

First payment month

After 7 years

Buying net worth $171,912

Renting net worth $149,862

In this set of assumptions, buying has the higher net worth starting in year 5.

Principal and interest $2,075.51. Cash to close includes a 2% closing-cost assumption.

Year by year rent versus buy comparison
Year	Owner cash	Rent paid	Owner net worth	Renter net worth
1	$35,106	$30,000	$70,690	$97,506
2	$35,358	$30,900	$85,957	$106,840
3	$35,618	$31,827	$101,825	$115,972
4	$35,885	$32,782	$118,325	$124,874
5	$36,160	$33,765	$135,485	$133,513
6	$36,444	$34,778	$153,336	$141,854
7	$36,736	$35,822	$171,912	$149,862

How this calculator works

The buyer pays the down payment and a 2% closing-cost assumption at the start.
The renter is modeled as investing that same cash and earning the return you enter.
Each year, the person who spends less on housing invests the difference.
Owner net worth is home value minus the loan balance and a selling-cost assumption.

The break-even year is only as good as the assumptions

A higher appreciation rate, a lower selling cost, or a longer stay can move the year when buying shows the higher net worth. The reverse is also true.

The model leaves out the mortgage-interest deduction and maintenance surprises. Use it to see how the assumptions interact, not as a prediction of either net worth.

Sources

CFPB: Owning a home

Common questions

Why is the renter's net worth invested cash?

The down payment and closing costs are money the renter still has. The model grows that cash at the investment return you choose, which is an assumption.

Does buying always win if I stay seven years?

No. Change appreciation, rent growth, or the return on invested cash and the comparison can flip.

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Longer guides on these topics are linked from the guides library.