Rent vs Buy Calculator
Should you rent or buy? Compare the estimated net cost of each over the years you choose, with PMI, property tax, upkeep, selling costs and the return on money you don’t spend on housing all in the math.
The starting figures are examples to edit, not quotes or market data.
Estimated result over 7 years
Renting, by $36,207
Over 7 years
$192,703
If sold at the end of year 7
$156,496
Year 15
First year buying's net cost is lower
| Principal & interest | $2,275 |
|---|---|
| Property tax | $333 |
| Homeowners insurance | $150 |
| Maintenance | $333 |
| HOA dues | $0 |
| PMI | $150 |
| Total | $3,242 |
| Rent | $2,100 |
|---|---|
| Renters insurance | $15 |
| Total | $2,115 |
Up front, buying takes $52,000 ($40,000 down plus $12,000 in closing costs). PMI is charged until month 109 (about year 10).
Year by year
| Year | Buy net cost | Rent net cost | Lower | Home value | Loan balance |
|---|---|---|---|---|---|
| 1 | $59,602 | $22,473 | Rent | $412,000 | $355,976 |
| 2 | $82,835 | $44,892 | Rent | $424,360 | $351,683 |
| 3 | $105,680 | $67,265 | Rent | $437,091 | $347,102 |
| 4 | $128,114 | $89,602 | Rent | $450,204 | $342,214 |
| 5 | $150,112 | $111,912 | Rent | $463,710 | $337,000 |
| 6 | $171,651 | $134,206 | Rent | $477,621 | $331,435 |
| 7 | $192,703 | $156,496 | Rent | $491,950 | $325,498 |
- Home value changes 3% a year; rent rises 3% a year.
- Money not spent on housing earns 5% a year, compounded monthly, with no tax on the gains.
- A fixed-rate 30-year loan at 6.5%, paid on schedule with no extra payments.
- Property tax and maintenance track the home’s value each year; insurance, HOA dues and renters insurance stay flat.
- The home is sold at the end of each year shown, paying 6% in selling costs and the loan balance.
- No income taxes: no mortgage interest deduction, no tax on the sale or on investment gains.
- Not included: moving costs, furnishing, rate changes, refinancing, or renter deposits.
The math runs entirely in your browser — the numbers you enter are never sent to our servers. They’re saved only on this device so they’re still here when you come back.
How this rent vs buy calculator works
The comparison
Buy = cash paid − sale proceeds − growth
Rent = rent paid − growth
- Cash paid
- down payment, closing costs, principal & interest, property tax, insurance, maintenance, HOA dues and PMI
- Sale proceeds
- the home’s value at the end, minus selling costs and the remaining loan balance
- Rent paid
- rent and renters insurance
- Growth
- investment growth on money that path didn’t spend on housing
Both paths start with the same money. The renter invests what the buyer spends up front. After that, in any month where one path costs less, that path invests the difference. Only the growth counts, not the money put in, so the difference between the two net costs is the difference in what each household would have at the end.
The breakeven year is the first year in which buying’s net cost drops below renting’s. The calculator looks up to 30 years out, even if you compare a shorter period. Closing costs and selling costs are paid once each, so the shorter the stay, the more of the total they make up.
Private mortgage insurance (PMI)
PMI is a type of mortgage insurance a lender may require on a conventional loan with a down payment of less than 20% of the purchase price, and it protects the lender, not you. (Consumer Financial Protection Bureau (opens in a new tab), verified Sep 25, 2026)
Your servicer generally must end PMI automatically on the date the balance is scheduled to reach 78% of the home’s original value, or after the midpoint of the loan term, as long as you’re current on payments. You can also ask in writing to cancel it once the balance is scheduled to reach 80%, if you meet the servicer’s conditions, such as a good payment history. (Consumer Financial Protection Bureau (opens in a new tab), verified Sep 25, 2026)
The calculator charges PMI as a yearly percentage of the original loan when the down payment is under 20%, and stops at the 78% point or the midpoint, whichever comes first. It uses the purchase price as the original value and doesn’t model an early cancellation request. Only this conventional-loan PMI is modeled.
What it leaves out
- Income taxes. Mortgage interest is an itemized deduction on Schedule A, so it only lowers your tax if you itemize (IRS (opens in a new tab), verified Sep 25, 2026). The calculator ignores it, along with tax on investment gains and on a home sale.
- Rate changes, refinancing and extra payments. The loan is fixed-rate and paid on schedule.
- Moving, furnishing and renter deposit costs, and any repairs beyond the maintenance percentage.
- Changes in insurance, HOA dues or renters insurance over time. They stay at the amounts you enter.
- Things that aren’t dollars: stability, flexibility, space, and how likely you are to move.
Every figure is an estimate built from your assumptions. Home values, rents and investment returns don’t move in straight lines, and small changes to them can flip the answer.
Try the house in your real budget
This calculator compares two paths in general. The free What-if planner in Beyond Payday uses your own income, bills, assets and debts. Its Buy a House option takes the price, down payment, closing costs, rate and term, adds the home, the loan and its monthly principal-and-interest payment to a what-if scenario, and takes the down payment and closing costs out of the cash account you pick. It then shows how your net worth, monthly bills and money left over would change. You can add property tax and insurance as bills in the same scenario. Your real data stays as it is.
It shows one before-and-after snapshot rather than a year-by-year projection. The account owner and spouse can use it. See the What-if planner with sample data.
Frequently asked questions
Is it cheaper to rent or buy?
It depends on the numbers, and mostly on how long you stay. Buying has one-time costs at both ends: closing costs when you buy and selling costs when you sell. The fewer years you spread those over, the more they weigh. The home price compared with the rent, the mortgage rate, how fast home values and rents change, and what your money could earn elsewhere all move the answer. That is why the calculator shows a year-by-year table and a breakeven year instead of a single verdict.
Can this tell me whether I should rent or buy?
It can show how the costs compare under the assumptions you enter. It cannot weigh things that are not dollars, such as stability, flexibility, space, or how likely you are to move, and it does not know the rest of your budget. Small changes to home appreciation, rent increases or the investment return can flip the result, so it helps to try more than one set of assumptions.
What does "net cost" mean here?
For buying, it is everything you pay (down payment, closing costs, mortgage payments, property tax, insurance, maintenance, HOA dues and PMI) minus what selling the home would bring in after selling costs and paying off the loan, minus any investment growth on money you saved in months when owning cost less than renting. For renting, it is the rent and renters insurance you pay minus the investment growth on money you did not spend on buying.
Why does the calculator count investment growth for the renter?
A buyer puts cash into a down payment and closing costs. A renter who keeps that cash could invest it, and could also invest the difference in any month when renting costs less than owning. Counting that growth, and the same growth for the buyer in months when owning costs less, keeps the comparison fair. The return is your assumption, and actual investment returns vary and can be negative.
When does PMI stop?
According to the Consumer Financial Protection Bureau, you can ask your servicer in writing to cancel private mortgage insurance on a conventional loan once the balance is scheduled to fall to 80% of the home's original value, if you meet conditions such as a good payment history, and the servicer generally must end it automatically when the balance is scheduled to reach 78%, or after the midpoint of the loan term, as long as you are current on payments. The calculator stops PMI at 78% or the midpoint, whichever comes first, uses the purchase price as the original value, and does not model an early cancellation request.
Does this include the mortgage interest deduction?
No. The IRS treats qualified mortgage interest as an itemized deduction on Schedule A, so it only lowers your tax if you itemize. The calculator leaves out income taxes entirely, including any deduction, tax on investment gains, and tax on the home sale.
Sources
- Consumer Financial Protection Bureau, What is private mortgage insurance? (opens in a new tab) — verified Sep 25, 2026
- Consumer Financial Protection Bureau, When can I remove private mortgage insurance (PMI) from my loan? (opens in a new tab) — verified Sep 25, 2026
- IRS, Topic no. 505, Interest expense (opens in a new tab) — verified Sep 25, 2026
Estimates for education, not financial advice.
Try buying a house in your real budget
Add your income, rent and bills to Beyond Payday, then use the free What-if planner’s Buy a House option to see what the loan payment does to your monthly bottom line, without changing your real data.
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Disclaimer: This calculator is for informational purposes only. Results are estimates based on your inputs and assumptions. Actual costs, home values, rents and returns will differ. Consult a qualified professional before making financial decisions.