Rent vs Buy Calculator

Why time horizon decides everything

Buying carries heavy one-time costs: roughly 3% to get in (closing costs) and about 6% to get out (agent commissions and seller fees). Spread over 3 years, those costs crush the equity you build; spread over 10, they shrink to a rounding error while appreciation and principal paydown compound. That is why the old guidance says buying usually wins after about 5 years — and why the honest answer is 'run your own numbers', which is what this tool does.

What the comparison counts

• Renting: rent with annual increases over your stay. (Renters insurance and the investment value of your would-be down payment are excluded — noted below.)
• Buying: down payment + closing costs + all payments (including taxes, insurance, maintenance at ~1% of value yearly), minus equity built and appreciation, plus selling costs at the end.

The factors people argue about

Opportunity cost: an $80,000 down payment invested instead could grow meaningfully — at 6% a year for 7 years, about $40,000 of gains the renter keeps. Forced savings: a mortgage makes you build equity monthly; few renters invest the difference with the same discipline. Stability: ownership fixes your housing cost and your address — worth real money to many families, and rent control or a great landlord can flip the math for renters. Use this calculator for the dollars, then weigh the life factors openly. If buying wins, your next steps are the affordability calculator and the down payment planner; if you are a first-time buyer, read the first-time buyer guide.