Compare the true cost of renting versus buying a home in today's market. Factor in current mortgage rates, property taxes, home appreciation, and potential investment returns to find your break-even point.
Shows total cash you pay over time (not including equity or investment gains)
After 7 years, your total out-of-pocket costs will be about $202,289.00 for renting and $369,165.00 for buying. Renting is the better financial decision here. The heavy upfront costs and interest from buying are not recovered within your 7-year timeline.
Buy Cost
$369,165.00
Rent Cost
$202,289.00
Difference
$166,876.00
Buying may cost more because your timeline is short or the upfront costs are too high.
| Year | Buy Cost | Rent Cost | Difference |
|---|---|---|---|
| 1 | $130,554.00 | $26,400.00 | $104,154.00 |
| 2 | $169,438.00 | $53,592.00 | $115,846.00 |
| 3 | $208,662.00 | $81,600.00 | $127,062.00 |
| 4 | $248,236.00 | $110,448.00 | $137,788.00 |
| 5 | $288,170.00 | $140,161.00 | $148,009.00 |
| 6 | $328,476.00 | $170,766.00 | $157,710.00 |
| 7 | $369,165.00 | $202,289.00 | $166,876.00 |
| 8 | $410,247.00 | $234,758.00 | $175,489.00 |
| 9 | $451,736.00 | $268,200.00 | $183,535.00 |
| 10 | $493,642.00 | $302,646.00 | $190,996.00 |
Estimates based on your inputs. Actual results may vary. Terms →
In many major markets, renting has become cheaper than buying on a monthly basis due to higher mortgage rates and elevated home prices. However, buying can still be the better long-term financial decision if you plan to stay in the home for more than 5 to 7 years and build equity.
Inflation typically favors buying over renting. When you buy a home with a fixed-rate mortgage, your principal and interest payments remain locked in for 30 years, acting as a hedge against inflation. Rents, on the other hand, tend to rise over time along with inflation.
The break-even point is the exact year when the total cost of buying (including down payment, closing costs, mortgage interest, property taxes, and maintenance, minus home appreciation) equals the total cost of renting (including monthly rent, renter's insurance, and the investment returns you could have earned by investing your down payment).
Most buyers use a home affordability calculator to estimate how much house they can realistically afford based on income, debt, and monthly budget.
Most buyers use a mortgage payment calculator to estimate their monthly cost before deciding how much house they can afford.
Most buyers use a down payment calculator to estimate how much cash they need upfront and how it affects their monthly payment.
Estimates based on your inputs. Actual results may vary. Terms →