Buy vs Rent Calculator
Should you buy or keep renting? This calculator compares the all-in cost of owning a U.S. home — mortgage interest, property tax (which varies by county/state), insurance, PMI, maintenance, and HOA — against renting and investing your would-be down payment. The right answer depends as much on how long you plan to stay as it does on the asking price.
How is this calculated?
Buying costs include closing costs (typically 2%–5% of price), mortgage interest paid (not principal, which builds equity), property tax, homeowners insurance, PMI if down payment is below 20%, maintenance at around 1% of value per year, and HOA. Renting costs are annual rent plus renters insurance. The model invests the would-be down payment and any monthly cost difference at an assumed return so the opportunity cost of tying up capital in real estate is reflected. State income tax effects on the mortgage interest deduction (where you itemize) are excluded.
Frequently Asked Questions
How long do I need to stay for buying to win?
The break-even is typically 5–7 years. Closing costs, agent commissions, title insurance, and the cost of selling all need time to amortize. In flat or falling markets the break-even stretches further; in a rising market with low rates it can be as short as 3 years.
Why is mortgage principal not counted as a cost?
Because it isn't a cost — it transfers cash from your bank account into equity in the property. Interest is the actual cost of the loan, similar to rent paid to a landlord. Principal payments build wealth on the asset side of your balance sheet, so only interest belongs in a like-for-like cost comparison with rent.
How much should I budget for maintenance?
A widely used rule is 1% of the home's value per year, covering HVAC service, roof, plumbing, and one larger replacement project averaged over time. Older homes and harsh climates often need more. Condos transfer some of this to HOA dues but you still cover anything inside your unit.
Does the calculator include the mortgage interest deduction?
It can be modeled if you itemize deductions on your federal return, but most filers now take the standard deduction so the MID has limited impact for them. State tax treatment varies — some states fully conform, others have caps or no benefit. Talk to a CPA before counting on the deduction in your decision.
Last updated: May 2026 · Rates sourced from IRS