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Rent vs Buy Calculator

Should you rent or buy? Enter your home price, monthly rent, and time horizon to compare the full cost of each option side by side. This calculator breaks the decision into four buckets — initial costs, recurring costs, opportunity cost, and net proceeds — and reports the result in today's dollars so you can see which choice really saves more.

$80,000
Or drag the purple line on the chart
Results
At your 7-year horizon, buying saves
$13,228
Buying broke even at year 6

Cumulative cost over time

in today's dollars
Drag the purple line to change your horizon

Cost breakdown at year 7

in today's dollars
CostRentingBuying
Initial costs
security deposit / down payment + closing costs
$2,500$92,000
Recurring costs
rent / mortgage, tax, insurance, maintenance
$207,901$244,510
Opportunity cost
forgone real return on locked-up cash
$877$32,282
Net proceeds
deposit returned / home value minus selling costs and loan
-$2,103-$172,845
Total cost at year 7$209,175$195,947

About This Rent vs Buy Calculator

The rent vs buy decision is one of the biggest financial choices you'll make, and most online calculators reduce it to a single number that hides why one option wins. This free calculator does the opposite: it splits both renting and buying into the same four cost buckets — initial costs, recurring costs, opportunity cost, and net proceeds — so you can see exactly which line item is driving the answer.

Buying-side costs include the down payment, closing costs, monthly mortgage payments (principal and interest), property taxes that scale with your home's appreciated value, homeowner's insurance, HOA, annual maintenance, and PMI when your down payment is below 20%. PMI automatically drops out once your amortized equity reaches 20% of the original purchase price. When you sell, the calculator subtracts selling costs and the remaining loan balance to give you net proceeds — which can be negative in the early years if selling costs exceed appreciation plus principal paid.

Renting-side costs include rent (escalated each year), the security deposit you put down at signing, the opportunity cost of that locked-up cash, and the deposit returned when you move out. The security deposit defaults to one month's rent.

All future cash flows are discounted to today's dollars using your inflation assumption, and opportunity cost uses your real return (investment return minus inflation), so you're not comparing nominal dollars at different points in time. The chart lets you drag a vertical line to any year on your timeline — the verdict, breakdown table, and breakeven marker update live so you can quickly answer 'what if I stay 5 years vs 15?' without retyping anything.

Use the advanced settings to tune every assumption to your situation — mortgage rate, property tax rate, appreciation, rent increase, investment return, and inflation. For deeper real estate investment analysis including seller financing, wrap mortgages, and amortization schedules, try our full-featured GoFlexi calculator.

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Frequently Asked Questions

Is it cheaper to rent or buy a home?

It depends on your specific situation — home prices, rent levels, interest rates, how long you plan to stay, and local market conditions all play a role. This calculator quantifies the answer by comparing the total cost of each option over your chosen time horizon, broken down into initial costs, recurring costs, opportunity cost, and net proceeds.

What is the breakeven point for buying vs renting?

The breakeven point is the year at which the cumulative cost of buying becomes less than the cumulative cost of renting, accounting for everything — selling costs, equity buildup, and the opportunity cost of your down payment. It typically ranges from 3 to 7 years depending on home prices, interest rates, and market appreciation. Staying longer than the breakeven point generally favors buying. The calculator marks this year with a green dashed line on the chart.

What costs are included when buying a home?

Buying costs include the down payment, closing costs (typically 2-5% of the purchase price), monthly mortgage payments (principal and interest), property taxes (calculated on your home's appreciated value each year), homeowner's insurance, HOA fees, and ongoing maintenance (typically 1-2% of home value per year, with 1.5% as a reasonable default). If your down payment is under 20%, PMI is automatically added and removed once your equity hits 20%. When you sell, you'll also pay selling costs (typically 5-6% of the sale price), which the calculator subtracts from your net proceeds.

Why does this calculator show results in today's dollars?

A dollar spent on rent in year 20 is worth less than a dollar spent today, because of inflation. To compare renting and buying fairly, this calculator discounts every future cash flow back to today's purchasing power using your inflation assumption (default 2.5%). Opportunity cost uses your real return (investment return minus inflation) for the same reason. Without this adjustment, future rent payments would look artificially expensive and buying would look artificially attractive — the inflation-adjusted comparison is the more honest one.

How does opportunity cost affect the rent vs buy decision?

When you buy, your down payment and closing costs are tied up in the home and can't earn investment returns. If you rented instead, that cash could be invested in the stock market or another asset earning, say, 7% per year. The calculator models the real (inflation-adjusted) return you'd forgo by locking up that capital. The renter also has a small opportunity cost on their security deposit, but it's typically tiny compared to the buyer's down payment.

What is PMI and when does it apply?

PMI (private mortgage insurance) is required by lenders when your down payment is less than 20% of the home's purchase price. It typically costs 0.46%-1.5% of your remaining loan balance per year. The calculator uses 0.5% as a reasonable default. PMI automatically drops off once you've paid down enough principal to reach 20% equity based on the original purchase price — the calculator handles this automatically, so you'll see PMI in the recurring-costs bucket for the early years of a low-down-payment scenario, then it disappears.

Should I buy a home if I plan to move in 3 years?

Short time horizons generally favor renting because the upfront costs of buying (down payment, closing costs) and the selling costs (5-6% agent commission plus other fees) are spread over fewer years. In most scenarios, net proceeds at year 1-3 are negative — meaning selling costs exceed appreciation plus principal paid. Drag the horizon line on the chart to year 3 and see the breakdown table to confirm for your specific numbers.

How does home appreciation affect the calculation?

Home appreciation builds equity over time, increasing your net sale proceeds when you eventually sell. Higher appreciation rates make buying more favorable, while flat or declining home values can tip the scales toward renting. The default 4% reflects long-term US average nominal appreciation; after subtracting 2.5% inflation, that's roughly 1.5% real appreciation. Adjust this and the inflation rate in advanced settings to model different market scenarios.

Does the calculator account for security deposits?

Yes. The renter-side initial cost includes a security deposit equal to one month's rent (the most common convention). The deposit is treated as returned at the end of your time horizon, discounted to today's dollars — so the renter loses a small amount of purchasing power on the deposit due to inflation, plus the opportunity cost of not having that cash invested. These are small numbers compared to the buyer's initial outlay, but the calculator tracks them symmetrically for an apples-to-apples comparison.

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