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Rent vs Buy Calculator

Compare the real cost of renting versus buying — including equity, appreciation, and investment returns.

Updated June 2026 · Editorial standards

Your details

$
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$
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yrs
Total cost to buy (5 yr)
$155,159
Total cost to rent (5 yr)
$91,766
Renting saves
$63,393
Break-even year
None

Renting is cheaper by $63,393 over 5 years. No break-even within 5 years.Buying doesn't break even within your 5-year horizon — consider a shorter time frame or lower home price.

Cumulative cost: buying vs renting

Buy vs Rent score

Strongly rentStrongly buy
Strongly rent6 / 100

Renting saves $63,393 over 5 years.

By the KalkWise Editorial Team Reviewed for accuracy Updated June 2026

What is the rent vs buy calculator?

In short

Whether renting or buying is cheaper depends on how long you stay. In the first few years, renting is often cheaper because buying involves closing costs (typically 3%), down payment opportunity cost, and higher housing costs. After the break-even point — often 5–7 years in most US markets — buying typically wins thanks to equity building and appreciation.

This rent vs buy calculator computes the true 5-year (or custom horizon) total cost of each path, accounting for closing costs, mortgage payments, property taxes, maintenance, equity gained, and the investment return you'd earn on the down payment if you rented instead.

How to use this calculator

  1. 1Enter the home price and your down payment percentage.
  2. 2Set the mortgage rate, property tax rate, and expected home appreciation.
  3. 3Enter your current monthly rent and an investment return for the down payment if invested.
  4. 4Adjust the time horizon to match how long you plan to stay.
  5. 5Compare total costs and find the break-even year.

The formula

costbuy=down+closing+P&I+tax+maint−equity
costrent=rent+ins−inv growth
Buying: cumulative cost = down + closing + P&I + tax + maintenance − equity gained. Renting: cumulative cost = rent + renter's insurance − investment growth on down payment.
P&I
— Monthly principal and interest payment
equity
— Principal paydown plus home appreciation
inv growth
— Growth of down payment invested in stocks
ins
— Renter's insurance (~$200/year)
maint
— Annual maintenance (1% of home value)

Worked example

The scenario

$350,000 home, 20% down, 6.5% mortgage, 1.2% tax, 3% appreciation, $2,000/month rent, 7% investment return, 5-year horizon.

gives

The result

Over 5 years, total buying cost ≈ $98,000 and total renting cost ≈ $87,000 — renting saves ~$11,000. Break-even occurs around year 7–8.

Common use cases

  • Deciding whether to buy a home or continue renting
  • Finding the break-even year before committing to a purchase
  • Comparing different time horizons (3 years vs 10 years)
  • Evaluating the opportunity cost of tying up a down payment

Limitations & assumptions

  • Assumes a 30-year fixed mortgage regardless of time horizon.
  • Closing costs are fixed at 3% — actual costs vary by state and lender.
  • Does not model PMI for down payments below 20%.
  • Rent inflation over the horizon is not modelled (assumes flat rent).
  • Tax benefits (mortgage interest deduction) are not included.

Frequently asked questions

Buying typically becomes cheaper after the break-even point — the year when cumulative buying costs drop below cumulative renting costs. This is typically 5–10 years depending on local market conditions, appreciation, and mortgage rate. If you plan to move in under 3 years, renting almost always wins.

Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.