Compare renting vs buying over 5-10 years. Find your break-even year and total wealth difference. Free rent vs buy calculator, no signup.
It depends on how long you'll stay, local price-to-rent ratios, mortgage rates, and your down payment. Generally, buying wins after the break-even year (often 5-7 years).
The year when total buying costs (mortgage, taxes, maintenance, opportunity cost) equal total renting costs plus invested savings. After this point, buying builds more wealth.
Mortgage payment, property taxes, insurance, HOA, maintenance, home appreciation, and the investment return you'd earn on the down payment if you rented instead.
It uses simplified assumptions. Mortgage interest and property tax deductions can favor buying further, especially in high-tax states with itemized returns.
Higher rates increase monthly mortgage payments significantly. At 7% interest, a $400,000 mortgage costs $2,661/month vs $1,996/month at 4%. Higher rates shift the break-even point later and may make renting more attractive in the short term.
Opportunity cost is the investment return you could earn on your down payment if you rented instead. If you put $80,000 into an index fund earning 7%/year vs a house down payment, that comparison matters. Our calculator includes this factor.