Quiz
How Much Do You Know About Buying vs. Renting?
Eight questions on the true costs of owning and renting.
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Buy vs. Rent Calculator
Compare the true cost of owning a home with renting and investing the difference, year by year, including taxes, upkeep and opportunity cost.
Questions this answers
- Is it cheaper to buy or rent where I live?
- How many years until buying beats renting?
- What if I invest the down payment instead?
- How much do property taxes, insurance and upkeep really cost?
- Does the mortgage interest deduction still matter in 2026?
Home purchase
True cost of ownershipMortgage P+I is just the starting point. Property tax, insurance, maintenance (historically 1-2% of home value per year), HOA fees, and PMI (if down payment under 20%) are all real ongoing costs.
Opportunity cost of down paymentThe down payment could instead be invested. This is the most frequently ignored cost of homeownership. At 7% returns, an $80K down payment grows to $157K in 10 years: that growth is a real cost of buying.
Closing costs & selling costsPurchase closing costs run 2-4%. Agent commissions and closing costs on sale typically run 6-8% of the sale price. These transaction costs mean buying almost always loses in the short run.
Renting
Rent + invest scenarioThe honest comparison. The renter invests the down payment and closing costs from day one, plus any monthly surplus if ownership costs exceed rent. This is net worth vs net worth, not payment vs payment.
Annual rent increaseHistorical average is around 3%. Rising rent erodes the renting advantage over time: a fixed mortgage payment becomes relatively cheaper as rent climbs.
Assumptions
Mortgage interest deductionYou only benefit if you itemize. The saving is your marginal tax rate times the amount by which mortgage interest plus property tax exceed the standard deduction for your filing status (2026: $16,100 single, $24,150 head of household, $32,200 married filing jointly). Below that, the saving is $0. Other itemized deductions (state income tax, charity) are not included.
Years to modelThe most important variable. Buying almost always wins over 20-30 years due to appreciation and fixed payments. Renting often wins over 3-5 years due to transaction costs. The break-even is typically 5-8 years.
Home appreciation3-4% reflects the US long-run historical average per Case-Shiller. Local markets vary significantly. Appreciation is not guaranteed and can be negative over short periods.
Buy vs. Rent Calculator: Results Summary
Recommended over 10 years
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Monthly cost breakdown
Mortgage P+I-
Property tax-
Insurance + maintenance + HOA-
PMI (if applicable)-
Itemizing tax saving-
True monthly cost of owning-
Monthly rent (year 1)-
Net worth if you buy
equity minus selling costs
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Net worth if you rent
portfolio value
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Net worth difference
buy minus rent
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Total interest paid
over mortgage life
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Home value at exit
after appreciation
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Opp. cost of upfront cash
down payment + closing costs, if invested
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What this means
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What moves the needle
How to read thisEach bar shows how the net worth gap (buy minus rent) shifts when one assumption moves up or down while everything else stays fixed. Longer bars mean the result is more sensitive to that input. A bar that crosses the center line means changing that assumption can flip the verdict.
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Favors rentingFavors buying
Chart view
Net worth if buying
Net worth if renting + investing
This calculator is for educational and informational purposes only. Results are estimates based on the inputs you provide and should not be taken as professional advice. The mortgage interest deduction is simplified: actual deductibility depends on itemizing, SALT caps, and other factors. Home appreciation, investment returns, and rent increases are assumptions, not guarantees. Always consult a qualified financial advisor and real estate professional for decisions involving investments, taxes, or financial planning.
Companion pieces
Go deeper on Buy vs Rent
Quizzes, guides and answers built to go with this calculator.
4 Guides
Read the guides
- Real Estate Agents Are Finished: AI + Blockchain Just Made Buying a Home as Easy as Ordering on Amazon
- When AI Breaks the 30-Year Mortgage
- Is AI + Blockchain About to Obliterate the Traditional Real Estate Industry?
- Think NFTs Are a Scam? Then Explain Real Estate
FAQs
5 common questions, answered
- How does the calculator decide whether buying or renting wins?
- What costs of owning are included?
- Does the mortgage interest deduction help me?
Learn
Articles 4
- Real Estate Agents Are Finished: AI + Blockchain Just Made Buying a Home as Easy as Ordering on AmazonHow AI and blockchain could cut commissions and the closing process.
- When AI Breaks the 30-Year MortgageHow income shocks could ripple through housing debt.
- Is AI + Blockchain About to Obliterate the Traditional Real Estate Industry?Where fees, delays and middlemen in real estate are most exposed.
- Think NFTs Are a Scam? Then Explain Real EstateProperty deeds as a plain-English guide to NFTs and ownership records.
Frequently asked questions
How does the calculator decide whether buying or renting wins?
It compares net worth at the end of your time horizon. The buyer owns home equity after selling costs. The renter invests the down payment, closing costs and any monthly savings versus owning. Whichever path ends with more wealth wins, and the chart shows the year the lead changes.
What costs of owning are included?
Mortgage principal and interest, property tax, homeowners insurance, maintenance, HOA dues, PMI when the down payment is under 20%, closing costs and selling costs. Mortgage payments stop once the loan is paid off. Tax savings from itemizing are included when they beat the standard deduction.
Does the mortgage interest deduction help me?
Only if your itemized deductions beat the standard deduction, which is $16,100 for single filers and $32,200 for married couples filing jointly in 2026. Many buyers take the standard deduction, so the interest deduction adds little. The calculator applies the 2026 standard deduction and the state and local tax cap for you.
Why does the return on invested savings matter so much?
Renting usually costs less up front, and that money can be invested. A higher assumed return makes renting look better, and a lower one favors buying. Try a cautious and an optimistic return to see how sensitive your answer is.
What does it leave out?
It does not include the capital gains exclusion on a home sale or taxes on the renter's investment gains, and it holds rates fixed. Use it for a clear side-by-side comparison, then confirm the details with a tax or mortgage professional before you decide.
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