Rent
vs. buy.
The honest version. Most rent-vs-buy tools quietly favor buying, by understating ownership costs and assuming the rent-side savings just disappear. This one models full ownership cost, the investment alternative on the down payment, and shows the breakeven year side-by-side.
Renting ahead at year 7, $41,673 difference in asset position between the two paths.
Breakeven year: none through yr 7 · Initial cash committed: $92,000 (down + 3.0% buyer closing costs)
The breakeven year is highly sensitive to a small number of assumptions, appreciation, investment return, rent inflation, maintenance. Move the inputs to test the math against your own situation. More on this →
Both lines start at −$92,000 in year 0 (the cash committed up-front is sunk; neither path has an asset yet). The brass line is the buyer’s asset position if they sold each year (sale proceeds after selling costs and mortgage payoff); the ink line is the renter’s investment account if they invested the same gross housing budget. The breakeven is where the brass line first meets or exceeds the ink line.
| YR | Home value | Loan balance | Equity | Buy net cost | Rent cost | Sale proceeds | Investment | Δ (B−R) |
|---|---|---|---|---|---|---|---|---|
| 1 | $412,000 | $316,749 | $95,251 | $38,060 | $30,200 | $62,291 | $106,300 | -$44,009 |
| 2 | $424,360 | $313,264 | $111,096 | $38,435 | $31,106 | $77,147 | $121,070 | -$43,922 |
| 3 | $437,091 | $309,526 | $127,565 | $38,822 | $32,039 | $92,597 | $136,327 | -$43,730 |
| 4 | $450,204 | $305,519 | $144,685 | $39,220 | $33,000 | $108,669 | $152,089 | -$43,420 |
| 5 | $463,710 | $301,221 | $162,489 | $39,630 | $33,990 | $125,392 | $168,375 | -$42,983 |
| 6 | $477,621 | $296,613 | $181,008 | $40,052 | $35,010 | $142,798 | $185,204 | -$42,405 |
| 7 | $491,950 | $291,672 | $200,278 | $40,488 | $36,060 | $160,922 | $202,595 | -$41,673 |
Standard deduction has been high enough since 2017 that most filers don’t itemize. Toggle on if your itemized deductions exceed the standard deduction.
The comparison framing. Both households commit the same gross cash flow to housing-and-savings: down + closing in year 0, then the buyer’s annual housing cost (P&I + property tax + insurance + maintenance + HOA + PMI, net of any tax savings) each year. The buyer pays it all to the home; the renter pays rent and routes the surplus to (or shortfall from) an investment account. At the end of the horizon, both households liquidate: the buyer sells the house, the renter cashes out the investment account. The chart shows each path’s asset position at every year, the crossover is the breakeven year.
Loan products modeled: conforming 30-year fixed only. ARM, interest-only, FHA, and VA all have meaningfully different year-by-year payment trajectories that change the comparison; this calculator doesn’t model them yet. The PITI calculator at /tools/mortgage-paymenthandles all five loan products.
Property tax is assessed on the appreciated home value each year. Some states cap reassessment significantly, California Proposition 13 limits annual increases to 2%, Florida’s Save Our Homes caps at the lesser of 3% or CPI. This calculator does not model those caps; in low-cap states the actual property-tax line will be lower than shown.
Maintenance at 1.5% of home value per year is the methodology default, a midpoint of common estimates, which range from 1% (newer homes, mild climate, low-touch) to 4% (older homes, deferred maintenance, harsh climate). For condos and co-ops where the monthly HOA already covers exterior, common-area, and building-system maintenance, drop this closer to 0.3–0.5% (covering interior repairs and appliances only) to avoid double-counting. Real-world variation is enormous; the input above lets you test sensitivity.
HOA dues are property-association fees common to condos, townhomes, co-ops, and planned communities. Typical ranges: $0 for detached single-family in non-HOA neighborhoods; $200–$500 for suburban townhomes and condos; $400–$1,500 for urban condos in dense markets; $1,000–$3,000+ for NYC co-ops, luxury high-rises, and SF buildings with amenities or live-in staff. In high-cost-of-living markets the HOA line is often the second-largest monthly cost of ownership after P&I, and it does not amortize away the way a fixed-rate mortgage does, HOA dues generally rise with inflation and assessments.
PMI applies when the origination LTV is above 80% and cancels automatically when the original-schedule balance reaches 78% of the original home price (Homeowners Protection Act). PMI rate is the methodology default by LTV band (0.32%–0.85% annually). For high-LTV scenarios the PMI line is material in early years and can shift the breakeven by a year or two.
Tax savings apply only when the buyer itemizes, the standard deduction post-2017 is high enough that most filers don’t. When itemizing, tax savings = (mortgage interest + property tax) × marginal federal rate, with the property-tax portion capped at $10,000 per the SALT cap. Real SALT is state income + property + sales combined; this calculator simplifies to property tax only since state income tax isn’t an input.
Investment return defaults to 7% (a long-run S&P 500 inflation-adjusted average). Real returns vary year to year and depend on your actual investment behavior, the alternative isn’t “automatic 7%,” it’s “investing the difference with the discipline to actually do it.” That discipline is non-trivial; the calculator silently assumes it.
What this comparison does not capture:stability and control of being a homeowner; flexibility of being a renter; community and neighborhood ties; the forced-savings effect of paying down a mortgage vs. the discipline required to invest the rent delta; tax benefits or penalties at sale (handled in /tools/seller-net-proceeds); regional variation in transfer taxes; and any non-financial factor in the decision. The number this calculator produces is one input to the decision, not the decision.
Methodology note. This implementation uses an asset-position comparison (sale proceeds vs. investment account balance), which is the apples-to-apples view of “who has more cash if they liquidate.” The methodology document defines the comparison slightly differently in a way that double-counts total_cost_buy against the buyer; that documentation revision is tracked in BACKLOG.md.