Lifestyle Decisions
Rent vs Buy Calculator
Should you rent or buy? This calculator accounts for every real cost — mortgage interest, taxes, insurance, maintenance, and the opportunity cost of your down payment.
Configure
Rent vs Buy parameters
Home purchase
Renting & returns
Net worth comparison over 10 years
| Year | 🏠 Buy Net Worth | 📈 Rent Net Worth | Winner |
|---|---|---|---|
| Year 1 | $95,743 | $94,399 | 🏠 Buy |
| Year 2 | $112,096 | $109,075 | 🏠 Buy |
| Year 3 | $129,085 | $124,024 | 🏠 Buy |
| Year 4 | $146,741 | $139,242 | 🏠 Buy |
| Year 5 | $165,092 | $154,725 | 🏠 Buy |
| Year 6 | $184,170 | $170,465 | 🏠 Buy |
| Year 7 | $204,010 | $186,456 | 🏠 Buy |
| Year 8 | $224,646 | $202,688 | 🏠 Buy |
| Year 9 | $246,116 | $219,150 | 🏠 Buy |
| Year 10 | $268,458 | $235,832 | 🏠 Buy |
Disclaimer: This comparison assumes stable returns and does not account for closing costs, HOA fees, insurance, capital gains tax, or rent tax deductions. Individual results will vary. Not financial advice.
By the numbers
4–7 yrs
Typical US break-even point for buying vs renting after accounting for all costs
2–5%
Total closing costs as a percentage of purchase price when buying a home
30+
Price-to-rent ratio in high-cost cities like San Francisco — strongly favoring renting
How the calculator works
01
Enter your home details
Input the home price, down payment, mortgage rate, and current monthly rent.
02
Set ongoing costs
Add property taxes, insurance, HOA fees, maintenance costs, and expected home appreciation rate.
03
Compare outcomes
See the break-even year, year-by-year net worth comparison, and total cost difference over your planned time horizon.
Frequently asked questions
Is it better to rent or buy a home? ▼
It depends on your local market, how long you plan to stay, and your financial situation. Generally, buying builds equity and benefits from appreciation, while renting offers flexibility. The break-even point is typically 3–7 years.
What is the break-even point when buying a home? ▼
The break-even point is the number of years at which the total cost of buying becomes less than the total cost of renting. Before this point, renting may be financially better; after it, buying typically wins.
What hidden costs of homeownership should I consider? ▼
Common hidden costs include property taxes (1–2% annually), homeowner's insurance, HOA fees, maintenance (1–2% of home value per year), closing costs (2–5%), and mortgage interest over the life of the loan.
What is the price-to-rent ratio and how do I use it? ▼
The price-to-rent ratio divides the home's purchase price by annual rent for a comparable property. A ratio above 20 generally favors renting; below 15 favors buying. Ratios between 15 and 20 suggest either option may work depending on your local market and how long you plan to stay.
How does home appreciation affect the rent vs buy decision? ▼
Even modest appreciation strongly favors buying over time. A $400,000 home appreciating at 3% annually reaches ~$537,000 after 10 years. At 5%, it reaches ~$652,000. Higher appreciation shortens the break-even year and significantly boosts long-term net worth for buyers.
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Disclaimer: Projections use simplified models and approximate averages. Real estate markets vary significantly by location. Tax implications depend on individual circumstances. Consult a licensed financial advisor before making housing decisions.
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