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US Buy vs Rent Calculator

Compare the long-term financial outcome of buying a home versus renting. See your projected net worth, breakeven year, and total costs under either path.

Purchase & Loan

$
$100,000$2,000,000
$
$12,000$400,000
3%100%
%
1%10%
yrs
10 yrs40 yrs

Rental

$
$500$10,000

Your Estimate

Renting Net Worth at Year 10

-$279,518

Buying Net Worth

-$290,628

Renting Net Worth

-$279,518

Difference

Renting saves $11,110

Renting is the better financial choice throughout this period. Buying never catches up within 10 years.

BuyingRenting

Net Worth Over Time

Buying
Renting
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US Buy vs Rent — Frequently Asked Questions

Is buying always better than renting in the US?
No, buying is not always better than renting. The right choice depends on how long you plan to stay in the home, local market conditions, mortgage rates, and your investment alternatives. In many expensive US cities, renting can be the better financial decision in the short to medium term. Our calculator computes your breakeven year to help you decide.
What is the breakeven year in a buy vs rent analysis?
The breakeven year is the point when cumulative net worth from buying exceeds cumulative net worth from renting. Before the breakeven year, renting builds more wealth. After it, buying pulls ahead. A breakeven within 3 to 5 years suggests buying is favorable. Beyond 7 years, renting may be the better financial choice in your market.
What costs does the buy vs rent calculator consider?
Our calculator factors in home appreciation, rent growth, investment returns on savings and down payment, property taxes, homeowners insurance, PMI or MIP, maintenance costs (typically 1% of home value annually), closing costs, and realtor commissions (historically 5% to 6% of sale price). You can adjust each assumption to match your market.
How does PMI affect the buy vs rent decision?
PMI adds 0.3% to 1.5% of the loan amount annually to your housing costs when your down payment is under 20%. This makes buying more expensive in the early years and extends the breakeven period. Conventional, FHA, and VA loans have different insurance structures that our calculator handles automatically.
What assumptions should I use for home appreciation and rent growth?
Historical US home appreciation averages 3% to 5% annually but varies significantly by market. Rent growth typically ranges from 2% to 4% annually. We recommend using conservative estimates for both. For investment returns on money not used for a down payment, the historical S&P 500 average of 7% to 10% is a reasonable starting point.