Rent vs Buy Calculator

Not always. Buying builds equity and hedges against rent increases, but comes with high transaction costs (5–8% to buy and sell). If you stay fewer than 5–7 years, renting is often cheaper. The break-even point depends on your local market, interest rate, and how rent compares to mortgage costs.

If you buy, you tie up your down payment in a home. The opportunity cost is the investment returns you give up by not investing that money in stocks or bonds. This calculator estimates what your down payment would grow to if invested at your assumed return rate instead.

Closing costs (2–5%), property taxes (0.5–2.5%/year), homeowner's insurance ($1,000–3,000/year), maintenance and repairs (1–2%/year), HOA fees, and eventual selling costs (5–6% agent commissions). These can add $10,000–30,000/year on a $400K home.

Home appreciation builds equity that offsets costs. Historically, US homes appreciate about 3–4% annually on average (roughly in line with inflation). However, appreciation varies enormously by location and time period. Never assume past appreciation will continue.