Rent vs Buy Calculator

The rent vs buy decision is one of the most significant financial choices most people make. The conventional wisdom — "buying is always better than throwing money away on rent" — is an oversimplification. The right answer depends on your timeline, local market conditions, mortgage rates, and how much capital you have for a down payment.

The key insight this calculator reveals: buying has high upfront costs (down payment, closing costs, early mortgage interest) and lower long-term costs as equity builds. Renting has no upfront cost but cumulative payments build no equity. The crossover point — the break-even year — determines which is better for any given time horizon.

A critical factor is the price-to-rent ratio: home purchase price divided by annual rent. In cities where this ratio exceeds 25–30, renting is often better unless you expect very high appreciation or plan to stay for 10+ years. In cities where the ratio is below 15–20, buying typically reaches break-even within 3–6 years.

This calculator computes "net buying cost" — the total cash paid out on housing minus the equity you've accumulated. This is the fairest comparison because it captures what you've truly "spent" on housing, just as rent is what you've spent as a renter. When net buying cost drops below cumulative rent, buying has become the better financial choice.