How to use this calculator
This calculator answers: How long until buying beats renting, once the true costs of both sides are compared?
Why this matters: It’s usually the biggest financial decision of your life, and the honest answer depends on your time horizon, not just the monthly payment.
- Enter Home price ($), Down payment (%), Mortgage rate, “Years you plan to stay”, and Current monthly rent ($), plus ownership costs (property tax, insurance, HOA, maintenance, PMI) and your growth assumptions.
- Results recalculate live as you type; the “Find my breakeven” button re-runs the full breakdown.
- Read “Your breakeven”: the year buying pulls ahead, with side-by-side totals. Try a 5-year vs 15-year stay to see why the time horizon — not the payment — decides the winner.
Your numbers
How the breakeven is found
- Buying, year by year: down payment + buying closing costs + every monthly cost (principal & interest, property tax, insurance, HOA, maintenance, PMI) — minus what you'd walk away with if you sold: the appreciated home value, less the remaining mortgage balance and selling costs — and minus the invested savings from months owning cost less than renting.
- Renting, year by year: rent grows at the assumed rent inflation rate. Any upfront cash the renter avoids tying up in the home, plus any monthly amount by which renting is cheaper than owning, is invested at the assumed return. If owning becomes cheaper in a given month, the monthly savings instead accrue to the buying side. Breakeven is the first year the buyer's cumulative net cost falls below the renter's after accounting for these invested cash-flow differences.
- Investing the difference: each simulated month, the calculator compares the renter's monthly cost (rent) with the owner's (P&I, tax, insurance, HOA, maintenance, PMI). Whichever side is cheaper invests the gap at the monthly equivalent of your investment return — so both paths get full credit for the cash they don't spend.
- Breakeven is the first year the buyer's net cost drops below the renter's. The single biggest swing factor is home appreciation — run it at a conservative and an optimistic number and check whether your decision survives both.
- Not modeled: the tax benefit of mortgage interest (most filers take the standard deduction, so it's usually $0), renters insurance, moving costs, or the value of your time spent on maintenance.
Frequently asked questions
What is the breakeven year in rent vs. buy?
The breakeven year is the first year when the total net cost of buying (down payment, closing costs, mortgage, taxes, insurance, HOA, maintenance — minus the equity you'd walk away with and minus any monthly savings invested while owning was cheaper) drops below the total net cost of renting for the same period. Stay longer than breakeven and buying has the lower lifetime cost; move sooner and renting wins.
Why does the calculator assume the cheaper side invests the difference?
Because it's the honest comparison. A buyer ties up the down payment and closing costs in the house; a renter keeps that money and can invest it — and in any month one path costs less, that side has extra cash to invest. The calculator starts the renter's investment balance with the down payment + buying closing costs, then invests each month's savings from whichever side is cheaper, all growing at the investment return you set, and you can change that assumption.
Does the calculator include the tax benefit of mortgage interest?
No. Since the 2017 tax changes roughly 90% of filers take the standard deduction, so most buyers get no incremental tax benefit from mortgage interest. If you itemize, buying is somewhat cheaper than shown here.
What if I put down less than 20%?
Most lenders then require private mortgage insurance (PMI), typically 0.3%–1.5% of the loan per year, until you reach 20% equity. Enter your estimated PMI as a monthly cost — it pushes the breakeven year later.
How sensitive is the answer to home price appreciation?
Very. Appreciation is the single biggest swing factor: at 5%+ annual appreciation buying usually wins within a few years, while at 0–2% renting often wins for a decade or more. Run the calculator at both a conservative and an optimistic appreciation rate and see whether your decision survives both.
Should I include HOA dues?
Yes, if the home you're considering has them. HOA dues are a real monthly cost of owning that renters don't pay, and they rise over time. Leaving them out flatters the buying case.