Rent vs Buy

Rent vs Buy Calculator

Total cost of owning versus renting over your time horizon, including what your cash could earn if invested instead, and the tax deduction only where it beats the standard deduction, with the break-even year, a sensitivity heatmap, and the equivalent-rent verdict.

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Owning: recurring costs

Enter each yearly or monthly; we convert it and echo the other period. Value-based costs (property tax, %-maintenance) grow with the home; fixed-dollar costs are held flat.

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Renting
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Taxes

Only the amount your itemized deductions beat the standard deduction is a real benefit; the renter gets the standard deduction free. SALT cap for 2025–29 is $40,000.

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Every dollar either path spends is grown to your horizon at the investment return, so the opportunity cost of the down payment and of every monthly difference is counted. PMI is not modeled; capital-gains tax above the exclusion is estimated at 15%.

Over your horizon
Equivalent rent: the NYT test
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Net cost of owning (all-in, minus sale proceeds)—
Net cost of renting—
Monthly mortgage payment (P&I)—
Home value at horizon—
Loan balance remaining at horizon—
Net sale proceeds at horizon—
Up-front cash opportunity cost (added to owning)—
Tax benefit over horizon (excess-over-standard)—
Break-even year—
Sensitivity: appreciation × investment return

The two assumptions that decide it. Each cell is the winner at your horizon; your inputs are outlined.

Buying wins Renting wins Stronger color = bigger margin.

What if you stay longer (or less)?

Same inputs, recomputed at nearby horizons. Your current horizon is highlighted; buying usually needs years to win.

Years heldCheaper option (by how much)
Next step

See the loan itself in the mortgage calculator, check what invested savings become in the investment growth calculator, or browse all the calculators.

Related tools: Rental Cash Flow / DSCR · BRRRR · Fix & Flip ROI · all calculators
Market data: 4,812 rental market grades · Best cash-flow rental markets 2026 · Rent out or sell? The actual math
Ranked lists: Highest yield · Cheapest vs. income · Rent covers the mortgage · Under $200k · Fastest-growing · Most stable

Common questions

Which is cheaper, renting or buying?

It depends mostly on how long you stay, what the home costs to carry, what rents do, and (the biggest lever) what your cash could earn if you invested it instead. Buying front-loads big one-time costs (down payment, closing, later selling costs) that need years to amortize; renting avoids them but never builds equity. This calculator totals both paths over your horizon, grows every dollar at your investment return so the opportunity cost is honest on both sides, and shows the winner with the math visible.

Why does the investment return matter so much?

Because a buyer ties up a large down payment plus closing costs, and pays more (or less) each month than a renter. Every dollar either party spends is grown to your horizon at the investment return you set, so the money a renter could invest is credited to renting and the money an owner ties up is charged to owning. It is the most decision-swinging input and the one most calculators quietly leave out, so it is exposed here. The sensitivity heatmap shows how the verdict flips as it changes.

Does it account for the mortgage-interest and property-tax deductions?

Yes, honestly. A renter already gets the standard deduction for free, so only the amount your itemized deductions exceed the standard deduction is a real benefit of owning. The calculator itemizes deductible mortgage interest (on up to $750,000 of loan) plus property tax capped at the SALT limit (a parameter you can set; the 2025–2029 cap is $40,000) and counts only the excess over the standard deduction, valued at your marginal tax rate. On sale, the §121 primary-residence exclusion ($500k married / $250k single) is applied to the gain, and only the excess is taxed. PMI is still not modeled.

What is the equivalent rent?

It is the monthly rent at which the two paths tie at your horizon: the NYT-style bottom line. Pay less than that to rent and renting wins; pay more and buying wins. Because everything else is held fixed, it turns a page of assumptions into one number you can check against real listings.

What is the sensitivity heatmap?

The two assumptions that decide rent-vs-buy are home appreciation and your investment return, and both are guesses. The heatmap runs the full comparison across a grid of the two and colors each cell by the winner and margin, so you can see how fragile or robust the verdict is, and read the plain-English rule, like “buying wins only if appreciation beats about X% and your investments earn under about Y%.”

What is the break-even year?

The first year at which the all-in, opportunity-cost-adjusted cost of owning drops below the cost of renting, evaluated year by year out to 40 years. Before it, the one-time costs of buying and selling dominate and renting wins; after it, ownership economics take over. If owning never wins within 40 years at your inputs, the calculator says so rather than extrapolating.