Rent vs Buy Calculator

The break-even point is the number of years it takes for the cumulative cost of buying a home to equal the cumulative cost of renting. After this point, buying becomes more financially advantageous than renting (excluding non-financial factors).

This point considers:

• Mortgage principal and interest payments
• Property taxes and maintenance costs
• Rent increases over time
• Home appreciation
• Opportunity cost of the down payment

Not exactly. While rent payments don't build equity like mortgage payments, renting provides value through:

• Housing services (shelter, security, location)
• Flexibility to move without transaction costs
• No maintenance responsibilities or costs
• Potential investment returns from alternative uses of money

Whether renting is "wasting" money depends on your personal circumstances, local market conditions, and how long you plan to stay.

Opportunity cost represents the returns you could have earned by investing the down payment (and monthly difference between rent and mortgage) instead of buying.

In our calculation, we assume you invest this money in an asset that returns your specified "opportunity cost" rate annually. This gives you a more complete picture of the financial trade-offs between renting and buying.