Rent vs Buy Calculator
Compare the financial outcomes of renting vs buying a home. See which builds more wealth over your intended stay — factoring mortgage costs, tax deductions, home appreciation, rent increases, and investment returns on your savings.
$80,000 down payment
State avg: 1.60%
Assumptions
State income/sales tax already counted toward the SALT cap — property tax deducts only the remaining cap.
Used for the SALT-cap phase-out above the statutory MAGI threshold.
Charitable gifts and other deductions available whether renting or buying.
Buying — Net Worth
$266,283Home value minus remaining mortgage
Renting — Invested Savings
$6,067,918Down payment + monthly savings invested
After 10 years, renting saves $5,801,635 compared to buying. The invested down payment + lower monthly costs grow faster than home equity in this scenario.
| Year | Buy Net Worth | Rent Net Worth | Home Value | Mortgage Left | Investments |
|---|---|---|---|---|---|
| 1 | $95,577 | $519,866 | $412,000 | $316,423 | $519,866 |
| 2 | $111,753 | $978,662 | $424,360 | $312,607 | $978,662 |
| 3 | $128,556 | $1.5M | $437,091 | $308,535 | $1.5M |
| 4 | $146,013 | $2.0M | $450,204 | $304,191 | $2.0M |
| 5 | $164,155 | $2.6M | $463,710 | $299,555 | $2.6M |
| 6 | $183,012 | $3.2M | $477,621 | $294,609 | $3.2M |
| 7 | $202,618 | $3.8M | $491,950 | $289,332 | $3.8M |
| 8 | $223,007 | $4.5M | $506,708 | $283,701 | $4.5M |
| 9 | $244,216 | $5.3M | $521,909 | $277,694 | $5.3M |
| 10 | $266,283 | $6.1M | $537,567 | $271,284 | $6.1M |
| Input | Value |
|---|---|
| Home Price | $400,000 |
| Monthly P&I | $2,023 |
| Down Payment + Closing | $92,000 |
| Monthly Rent | $2,000 |
| Home Appreciation | 3%/yr |
| Rent Increase | 3%/yr |
| Investment Return | 7%/yr |
| Years Staying | 10 years |
This model compares net worth outcomes under both scenarios. It does not account for one-time home repairs, HOA fees, PMI, moving costs, or the psychological value of homeownership. Actual results depend on local market conditions.
Edit inputs ↑Frequently asked questions
Is it better to rent or buy a home?
It depends on how long you plan to stay, local home prices vs rents, and your financial assumptions. Generally, buying becomes more advantageous the longer you stay (typically 5+ years), as the upfront closing costs are amortized over time and home appreciation + mortgage paydown build equity.
What costs are included in the rent vs buy calculator?
Buying: down payment, closing costs (typically 2-5%), monthly P&I, property tax, home insurance, maintenance (1%/yr default), minus tax deductions for mortgage interest and property tax. Renting: monthly rent, renters insurance, plus investment returns on the money you would have spent on the down payment and closing costs.
How does the mortgage interest tax deduction affect rent vs buy?
Buying only helps at tax time when your itemized deductions exceed the standard deduction for your filing status. The calculator compares against that standard deduction and applies the real limits: mortgage interest on up to $750,000 of acquisition debt ($375,000 if married filing separately), and property tax only up to your remaining SALT cap. The tax saving is then valued at your marginal tax rate.
What is the breakeven point for buying vs renting?
The breakeven year is when the net worth from buying (home equity) exceeds the net worth from renting (invested savings). This typically ranges from 3-7 years depending on home appreciation, rent increases, and mortgage rates.