Compare the true cost of renting vs buying over 5, 10, or 30 years. Includes rent increases, home appreciation, closing costs, and opportunity cost so you can make the smartest decision for your financial future.
The rent vs. buy decision is one of the most consequential financial choices you will make. Buying builds equity and offers payment stability, but it comes with maintenance costs, property taxes, and reduced flexibility. Renting costs less upfront and allows you to invest the difference, but rent increases over time while a fixed-rate mortgage payment stays the same. Our analysis shows that in most US markets, buying becomes cheaper than renting after 3–5 years — but only if home prices and rents follow historical trends. Use this calculator to enter your local numbers and see the breakeven point for your situation.
Key Insight
Renting is cheaper than buying across all 10 years in this scenario. Buying costs $97,929 more over the comparison period. Note: Analysis assumes 3% annual home appreciation.
Set your rent and buy details to compare the true cost over time.
Cumulative cost comparison over 10 years (includes 3%/yr home appreciation)
| Year | Rent (Cumulative) | Buy (Cumulative) | Equity Built | Winner |
|---|---|---|---|---|
| 1 | $24,000 | $37,306 | $95,410 | Rent |
| 2 | $48,720 | $74,612 | $111,418 | Rent |
| 3 | $74,182 | $111,919 | $128,051 | Rent |
| 4 | $100,407 | $149,225 | $145,337 | Rent |
| 5 | $127,419 | $186,531 | $163,307 | Rent |
| 6 | $155,242 | $223,837 | $181,994 | Rent |
| 7 | $183,899 | $261,143 | $201,430 | Rent |
| 8 | $213,416 | $298,449 | $221,651 | Rent |
| 9 | $243,819 | $335,756 | $242,696 | Rent |
| 10 | $275,133 | $373,062 | $264,603 | Rent |
N/A
Breakeven Year (Buy vs Rent)
Renting cheaper all 10 years
$97,929
Saved by Renting
over 10 years
$1,109
Rent cheaper/month
Buy if: You plan to stay in the home for at least 3–5 years, have a stable income and emergency fund, can afford the down payment without depleting savings, and want to build long-term equity.
Rent if: You anticipate moving within 2–3 years, your income is variable or uncertain, you lack savings for a down payment and closing costs, or the buy-to-rent price ratio in your area is very high.
Important: This calculator does not account for closing costs (typically 2–5% of home price), selling costs when you move, or the opportunity cost of your down payment invested elsewhere. Consider these factors alongside the results.
Is it better to rent or buy a house?
The answer depends on your personal situation. Generally, buying makes more sense if you plan to stay in the home for 5+ years, have stable income, and can afford the down payment and monthly costs. Renting offers more flexibility, no maintenance responsibility, and lower upfront costs. Our calculator compares the true total cost of each option over your comparison period.
At what point does buying become cheaper than renting?
The breakeven point varies by market. In most cases, buying becomes cheaper than renting when you stay for 3–5 years, but in high-appreciation markets or areas with high rent increases, breakeven can occur in 2–3 years. Our calculator shows you the exact breakeven year based on your inputs.
Does home appreciation matter for the rent vs buy decision?
Yes, home appreciation significantly affects the decision. If homes in your area appreciate 3–5% annually, you build equity faster and buying is more advantageous. Our calculator assumes 3% annual appreciation, which is close to the historical national average. You can adjust this in the advanced settings.
What costs are included in the "buy" scenario?
The buy scenario includes your monthly mortgage payment (principal + interest), property taxes, homeowners insurance, HOA fees, and estimated monthly maintenance costs (typically 1% of home value annually divided by 12). It does not include closing costs or realtor fees when selling.
Why does rent increase each year in the calculator?
Rent typically increases annually due to inflation and market conditions. Our default assumption is a 3% annual rent increase, which is a realistic historical average. This is one of the key advantages of buying — your fixed mortgage payment does not increase (though property taxes and insurance may).
Continue exploring housing costs and mortgage options with these related tools.