Smart Calculators SmartCalculators

Rent vs Buy Calculator

Compare the total cost of renting against buying over the years you plan to stay, and find the break-even year. Counts property tax, upkeep, HOA, PMI, closing and selling costs, and the return on the cash a down payment would tie up.

Sets the purchase and sale costs, the recurring taxes and the tax regime. Change any figure afterwards — the country only fills them in.

USD

%

%

USD

yr

What you expect to happen

These four assumptions decide the answer. Change one and watch the verdict move.

%

%

%

What the money you don't tie up in a house earns instead. Move this one first: over the plausible range it changes the answer more than the mortgage rate does.

%

Applied to insurance, HOA fees and the standard deduction. Not to rent — rent has its own growth rate above.

What owning costs — property tax 0.9%, upkeep 1%, 6% to sell

%

Percent of the home's value, every year. Around 0.9% is the national average; plenty of counties are double that.

USD /yr

%

Percent of the home's value, every year. The old rule of thumb is 1%; 1–2% is the honest range once you count the roof you replace once.

USD /mo

%

Charged only while your down payment is under 20%. At 20% or more this page bills no PMI, whatever you type here.

%

Percent of the price: lender fees, title, escrow, inspection. 2–5% is the usual range.

USD

The part that does not scale with the price: appraisal, inspection, recording fees.

%

Percent of the sale price: agent commission, transfer taxes, the lot. 5–6% is typical since the 2024 NAR settlement.

USD

Anything charged as a flat fee rather than a share of the price.

What renting costs — one month's deposit, insurance, move-in fees

USD /mo

mo

USD

Income tax — 22% bracket, 15% on gains

%

Your federal bracket. State income tax is not modeled, on either side.

%

The long-term rate on investment gains — and on any home-sale gain above the exclusion. It is charged to whichever side has the gains.

Renting is ahead after 7 years

$6,681

Buy $193,878 against rent $200,559 — net worth built from the same starting cash

Break-even

8 years

The answer this page leads with: buying overtakes renting in month 96, counting the 5% your down payment could have earned invested instead.

Cash break-even

4 years 3 months

Money in and money out only, with no investment return counted on either side.

This is the number most calculators publish. The card beside it runs the same comparison with the 5% your down payment could have earned added back, and that is the one this page answers with.

Monthly cost gap, month one

$820

Owning $3,235 against renting $2,415, before any tax effect.

Owning costs $820 more a month at the start — the gap the renter invests.

Home equity after 7 years

$193,878

$553,443 of value, less $326,358 still owed and $33,207 to sell.

What the owner pays in month one

$3,235 a month

71% 10% 12%
  • Principal & interest $2,313 · 71%
  • Property tax $338 · 10%
  • Insurance $208 · 6%
  • Maintenance $376 · 12%

Net worth, if you buy and if you rent

Over 30 years the buyer's net worth goes from $79,593 at the end of year one to $1,137,163, and the renter's from $113,267 to $629,766. The two lines cross at 8 years, which is the break-even.

  • If you buy
  • If you rent

One point per year, at the end of the year. Where the two lines cross is where buying overtakes renting.

Year one: $23,858 of mortgage interest plus $4,116 of property tax comes to $27,974, against a standard deduction of $32,200 for a couple filing jointly. Income-tax saving counted here: $0.

Price-to-rent ratio 15.6. Under 15 usually favors buying and over 20 usually favors renting — a rule of thumb that ignores your mortgage rate, which this page does not.

The comparison runs the full 30 years whatever your loan term, and assumes you sell at the end of the 7 years you entered.

Where the money went over 7 years

Item If you buy If you rent
Upfront cash $99,000 $2,400
Housing bills over 7 years $280,061 $222,058
Income tax saved $0 $0
Total cash out $379,061 $224,458
Difference invested at 5% $0 $205,846
Tax on investment gains $0 -$7,687
Deposit returned $0 $2,400
Home value at sale $553,443 $0
Selling costs -$33,207 $0
Mortgage still owed -$326,358 $0
Net worth after 7 years $193,878 $200,559

Both columns add to the last row. The difference in cash out is invested at 5% on whichever side is paying less that month.

Year by year, all 30 years
Year If you buy If you rent Buy − rent Home equity
1 $79,593 $113,267 -$33,674 $79,593
2 $96,836 $127,629 -$30,793 $96,836
3 $114,755 $142,077 -$27,322 $114,755
4 $133,386 $156,604 -$23,218 $133,386
5 $152,760 $171,200 -$18,440 $152,760
6 $172,913 $185,855 -$12,942 $172,913
7 $193,878 $200,559 -$6,681 $193,878
8 $215,699 $215,301 $398 $215,699
9 $238,414 $230,065 $8,349 $238,414
10 $262,068 $244,839 $17,229 $262,068
11 $286,706 $259,609 $27,097 $286,706
12 $312,375 $274,356 $38,019 $312,375
13 $339,130 $289,065 $50,065 $339,130
14 $367,020 $303,715 $63,305 $367,020
15 $396,106 $318,286 $77,820 $396,106
16 $426,480 $332,788 $93,692 $426,448
17 $458,946 $347,941 $111,005 $458,107
18 $493,706 $363,853 $129,853 $491,153
19 $530,898 $380,558 $150,340 $525,658
20 $570,667 $398,100 $172,567 $561,697
21 $613,164 $416,519 $196,645 $599,351
22 $658,551 $435,858 $222,693 $638,703
23 $707,002 $456,164 $250,838 $679,844
24 $758,699 $477,486 $281,213 $722,871
25 $813,835 $499,874 $313,961 $767,884
26 $872,613 $523,381 $349,232 $814,991
27 $935,249 $548,064 $387,185 $864,304
28 $999,304 $573,981 $425,323 $913,277
29 $1,066,006 $601,193 $464,813 $963,021
30 $1,137,163 $629,766 $507,397 $1,015,222

Net worth at the end of each year. A positive figure under Buy − rent means buying is ahead. Your own horizon, year 7, is marked.

What moves the answer
  • Investment return — 3%: 5 years 10 months. 7%: 15 years 10 months.
  • Home appreciation — 2%: 14 years 8 months. 4%: 4 years 7 months.
  • Monthly rent — $2,160: 14 years 5 months. $2,640: 5 years 2 months.
  • Mortgage rate — 5.66%: 4 years 11 months. 7.66%: 14 years 4 months.
  • Costs to sell — 4%: 6 years 4 months. 8%: 9 years 5 months.
  • Down payment — 10%: 12 years one month. 30%: 6 years 10 months.

One input at a time, everything else exactly as you left it.

Why your mortgage-interest deduction may be worth nothing

The mortgage-interest deduction only pays you anything when your itemized deductions beat the standard deduction. For tax year 2026 that standard deduction is $16,100 filing single, $32,200 married filing jointly and $24,150 head of household, and this page grows it with inflation across every year of the comparison.

What you itemize against it, on the housing side, is your deductible mortgage interest plus property tax capped at $40,400. Interest is deductible on the first $750,000 of acquisition debt only, so a larger loan does not deduct proportionally more.

Most calculators credit a flat percentage of all your mortgage interest. That is right for the roughly one filer in ten who itemizes and wrong for everyone else, which is why this page checks your filing status before crediting a single dollar. Switch the filing status and watch the break-even move on identical money.

Only federal income tax is modeled. State income tax, the alternative minimum tax and any phase-outs are not, and the constants above are the 2026 figures.

Money is rounded to the unit wherever it is shown, and the totals are the sums of those rounded parts, so every column adds up as printed. The month-by-month model itself runs unrounded, and break-even is reported in whole months.

Share
WhatsApp Telegram X Facebook Reddit

See the full mortgage payment and amortization schedule

This calculator is for informational purposes only. It does not constitute financial advice.

Rent vs buy break-even calculator. The month buying overtakes renting, on your own numbers.

A rent-vs-buy calculator finds the month a buyer's net worth passes a renter's, when the renter invests the down payment and every month's cost difference. This page prints two break-evens side by side — 8 years once the down payment's forgone investment return is counted, 4 years 3 months without it — and credits the mortgage-interest deduction only when it beats your standard deduction.

What the Rent vs Buy Break-Even Measures

The rent-vs-buy break-even is the month at which a buyer's net worth overtakes a renter's, where the renter starts with the same cash, invests it, and adds every month's cost difference to the same account. On the numbers this page loads with — a $450,000 home, 20% down at 6.66% against $2,400 a month in rent — that month is 96, and the card reads 8 years.
A second card sits beside it and says 4 years 3 months. That is the same comparison with the investment return switched off on both sides: money out, money in, and the sale at the end. The gap between the two is what the $90,000 down payment and the $9,000 of closing costs would have earned at 5% a year while they sat in the house instead. Both numbers are right, they answer different questions, and a page that prints one of them has made the choice for you. Calculator.net's default state publishes a single line, "Buying is cheaper if you stay for 4.9 years or longer". Zillow publishes a single breakeven horizon. Redfin's rent-vs-buy tool breaks the comparison into four cost categories and names no break-even year at all.
The verdict card answers a third question: who is ahead at the horizon you typed, rather than when the crossing happens. At seven years the buyer's net worth is $193,878 and the renter's is $200,559, so the card reads Renting is ahead after 7 years while the break-even card next to it puts the crossing in year eight. The default horizon sits one year short of the crossing — one step of the slider, from seven years to eight, flips the verdict card.
The income-tax line under the cards is where these tools disagree most. In year one the loan throws off $23,858 of deductible mortgage interest, the property tax adds $4,116, and the two come to $27,974 of itemizable housing deductions. The 2026 standard deduction for a married couple filing jointly is $32,200, published by the IRS in its tax-year-2026 inflation adjustments. $27,974 loses to $32,200, so the couple takes the standard deduction, and the mortgage interest is worth nothing at tax time. The line prints $0 and the model credits $0.
Several of the other calculators credit something anyway. NerdWallet's methodology says so in as many words: "We assume buyers can save on taxes by itemizing federal tax deductions for both property tax and mortgage interest." CalcTitan asks for one combined federal-plus-state marginal rate and never asks your filing status. Zillow's research index does test the benefit against a standard deduction, but with a single assumed marginal rate of 25% and one average standard deduction standing in for every household it measures. BuyVsRent.org collects a filing status and still quotes the 2024 amounts, $14,600 and $29,200. MoneyCalc.net is the exception in this group: it carries a filing-status dropdown and measures the housing deductions against the 2026 standard deduction, which is the same test run here. This page takes the filing status you pick, uses the 2026 standard deduction that goes with it, grows it at your inflation rate for every year of the comparison, and credits a dollar of deduction only when there is one to credit.
The test decides whole years of the answer. Change nothing but the filing status, from married filing jointly to single — same house, same loan, same rent — and the standard deduction halves to $16,100, the interest starts clearing it, and the break-even moves from month 96 to month 72. That is two years of difference produced by one field on a tax form. Nationally the test bites for almost everyone: USAFacts, reading IRS filing statistics, puts the share of returns claiming itemized deductions at 30.6% in 2017 and 9.5% in 2023, with the mortgage-interest deduction itself claimed on 22.1% of returns before the 2017 law and 7.2% after it.
The price-to-rent line under the cards is the old shorthand for the whole question: $450,000 divided by $28,800 of annual rent is 15.6. Under 15 the rule of thumb says buy, over 20 it says rent, and 15.6 lands between the two where the rule has nothing to say. The ratio is built from this year's rent against this year's price, so a market where rents are climbing faster than prices reads identically to one where they are not — which is why it ships as a footnote rather than a verdict. If the payment and the amortization schedule are what you came for rather than the comparison, the mortgage calculator is the shorter route.

How to Use the Rent vs Buy Calculator

Nine fields are on screen when the page loads, and three folds hold the rest. Money fields carry a USD prefix rather than a dollar sign; the figures in the cards and tables below use the sign.
1. Home price, Down payment, Mortgage rate, Monthly rent. Four numbers decide most of the answer. The rent has to be for a home you would take instead of the one you are buying — comparing a two-bedroom purchase against a studio rental is the fastest way to a wrong break-even.
2. How long you'll stay. A slider from 1 to 30 years. It moves the verdict card, the equity card, the highlighted row in the year-by-year table and the whole reconciliation, and it leaves both break-even cards alone: the crossing is a property of your assumptions, not of your plans. Set it to your real horizon and read the verdict; read the break-even to find out how far off your horizon is from the crossing.
3. What you expect to happen. This block ships open because it is where the answer is decided: Home value grows, Rent grows, Investments return, Inflation. The helper under Investments return says to move that one first, and the What moves the answer fold shows why: two points either side of the default shifts the crossing by ten years.
4. What owning costs. A fold holding loan term, property tax rate, home insurance, maintenance and repairs, HOA or condo fee, PMI, closing costs to buy and costs to sell. Its closed title carries the property-tax rate, the upkeep rate and the selling cost, so you can check the three that matter without opening it. PMI is billed only while the down payment is under 20%.
5. What renting costs. Renter's insurance, the deposit in months of rent, and any broker or move-in fee. The deposit comes back at the end on the renting side, which is why it appears twice in the reconciliation.
6. Income tax. Filing status, marginal tax rate, capital gains rate. Pick Skip tax effects and the two rate fields disappear along with the tax layer — no deduction for the buyer, and no capital-gains tax on the renter's portfolio either. That symmetry matters, and it is why switching tax off pushes the crossing later rather than earlier.
Five cards read out the answer. The hero card names the winner at your horizon and the size of the gap. Break-even and Cash break-even sit side by side, the first counting the down payment's forgone return and the second ignoring it. Monthly cost gap, month one compares the owner's bill with the renter's before any tax effect. Home equity after your horizon breaks the sale into value, mortgage still owed and the cost of selling. A split bar underneath shows what the owner pays in month one, sliced into principal and interest, property tax, insurance, maintenance, and HOA plus PMI.
Below the cards, the two net-worth curves are plotted for all 30 years and the point where they cross is the break-even. The year-one deduction arithmetic reads first, in body type, then two short lines: the price-to-rent ratio and a note that the comparison runs the full 30 years whatever your loan term. Then two tables — Where the money went, eleven rows in which both columns add to the last one, and Year by year, all 30 years, with your own horizon marked. Two folds follow: What moves the answer, which re-runs the model around whatever state you are in one input at a time, and Why your mortgage-interest deduction may be worth nothing, which prints the tax constants in force. The rounding policy closes the page under them.
Anything you change from the defaults is written into the address bar, so a link reopens the scenario exactly as you left it. That is the useful thing to send to the person arguing with you about it.

Worked Rent vs Buy Examples

The state the page opens on: $450,000 against $2,400 a month

Leave everything alone. A $450,000 home with 20% down at 6.66% over 30 years, $2,400 of rent, seven years in the house, 0.9% property tax, $2,500 a year of home insurance, 1% maintenance, 2% to buy and 6% to sell, 3% appreciation, 3% rent growth, 5% investment return, married filing jointly at 22%.
Month one costs the owner $3,235 — $2,313 of principal and interest, $338 of property tax, $208 of insurance, $376 of maintenance, no PMI at 20% down — against $2,415 for the renter. The $820 gap is what the renter invests every month, on top of the $96,600 the renter's account opens with — the buyer's $99,000 of down payment and closing costs, less the $2,400 deposit the renter still has to hand over.
Break-even lands at month 96, so the card reads 8 years. Cash break-even is month 51, 4 years 3 months. At the seven-year horizon the buyer is worth $193,878 and the renter $200,559, so renting is ahead by $6,681 — a year short of the crossing, and the year table shows the sign flip in the row below.

You are moving again in five years

Drag the horizon slider to 5. Nothing about the crossing changes, because the crossing does not depend on how long you stay; what changes is which side of it you are standing on. Month 60 is well short of month 96, so the verdict card reads Renting is ahead.
The cash break-even had already gone by at month 51, which is where the five-year answer trips people up. On money in and money out, buying had pulled ahead nine months before the five-year mark. Counting what the $99,000 would have earned at 5% while it sat in the house, it has not. Whether the five-year purchase is a mistake depends entirely on which of those two accounts you keep.
One input rescues it. Push Home value grows from 3% to 4% and the crossing drops to 4 years 7 months, so the same five-year stay wins. A five-year buy is a bet on appreciation, and this is where the size of the bet shows.

Same money, different filing status

Open the income-tax fold and change filing status from Married filing jointly to Single. Touch nothing else.
The year-one arithmetic is unchanged: $23,858 of mortgage interest plus $4,116 of property tax is $27,974. What changes is what it is measured against. The 2026 standard deduction falls from $32,200 to $16,100, so $11,874 of the housing deductions now clear it, and 22% of that is credited to the buyer every year the numbers hold.
Break-even moves from month 96 to month 72 — from 8 years to 6 years — with nothing about the house, the loan or the rent touched. A calculator that credits a flat percentage of your mortgage interest reports that second answer for everybody, including the couple whose real credit is zero.

Turning the tax layer off, and why it makes buying look worse

Set filing status to Skip tax effects. The marginal and capital-gains fields disappear, and break-even moves to month 113, 9 years 5 months — later than the 8 years the married couple gets, even though the buyer has just lost a deduction.
That is the model checking itself. Switching tax off takes the mortgage-interest deduction away from the buyer and the capital-gains tax away from the renter's portfolio, and at these numbers the renter's gains are the larger of the two effects: the deduction was worth $0 anyway, while the 15% charged on the renter's investment growth was worth real money. Remove both and renting improves.
Use this setting when you want the housing comparison stripped of tax entirely, for a rough read or because your own situation is not federal-only. Read it as tax removed from both sides at once, which is what it does.

What the size of the down payment does to the crossing

Everything else at default, moving only the down payment:
Pay cash for the whole house and break-even arrives at month 36, 3 years. There is no interest, so there is nothing to deduct and nothing to amortize; what is left is the sale price against the transaction costs.
At 30% down the crossing is month 82, 6 years 10 months. At 20% it is month 96, 8 years. At 10% it is month 145, 12 years 1 month.
More cash down makes buying win sooner in this model, because the alternative use of that cash earns 5% while the mortgage costs 6.66%. Raise the investment return above the mortgage rate and the ordering reverses. That is the trade the two break-even cards are built to show.
Below 20% down, PMI joins the bill. At 5% down the model charges it for 126 months — ten and a half years — until the scheduled balance reaches 80% of the original price. At exactly 20% it charges none, whatever number sits in the PMI field.

When buying never overtakes renting

Take the investment return from 5% to 8% and leave everything else. The break-even card reads Never, and the note under it says buying does not overtake renting inside 30 years at these assumptions.
Nothing about the house changed. The renter's $96,600 head start, compounding at 8% for three decades, outgrows a home appreciating at 3% net of 6% selling costs. Rent of $0 gets there from the other direction: the calculator computes that state rather than blocking it, and the answer is Never.
A Never means only that at these six or seven assumptions, held flat for thirty years, the arithmetic does not cross. Move the assumption you are least sure of and see how much of the result was resting on it.

What Moves the Break-Even (8 Years at the Default Settings)

One input changed, everything else at defaultBreak-even at the lower valueBreak-even at the higher value
Investment return, 3% or 7% (default 5%)5 years 10 months15 years 10 months
Home appreciation, 2% or 4% (default 3%)14 years 8 months4 years 7 months
Monthly rent, $2,160 or $2,640 (default $2,400)14 years 5 months5 years 2 months
Mortgage rate, 5.66% or 7.66% (default 6.66%)4 years 11 months14 years 4 months
Costs to sell, 4% or 8% (default 6%)6 years 4 months9 years 5 months
Down payment, 10% or 30% (default 20%)12 years 1 month6 years 10 months

The Model, Month by Month

break-even=min⁡{ m  :  NWbuy(m)≥NWrent(m) }\text{break-even} = \min\{\, m \;:\; NW_{\text{buy}}(m) \ge NW_{\text{rent}}(m) \,\}
  • mm = Month, 1 through 360. The comparison always runs the full 30 years, whatever your loan term or your horizon
  • yy = Year of the comparison, 1 through 30. The annual rates step up at each year boundary, not every month
  • PP = Home price you entered — the purchase price, before closing costs
  • aa = Home value grows: the annual appreciation rate, applied to the purchase price
  • V(m)V(m) = Home value in month m — the purchase price grown at the appreciation rate you entered
  • LL = Original loan amount: the home price less the down payment
  • B(m)B(m) = Mortgage balance in month m, taken from the amortization schedule; zero once the loan is paid off
  • MM = Monthly principal and interest, fixed for the life of the loan
  • tpt_p = Property tax rate a year, charged on the home's current value rather than on the price you paid
  • tmt_m = Maintenance and repairs a year, also a share of current value
  • II = Home insurance for a year, billed monthly and stepped up by inflation each year
  • HH = HOA or condo fee a month, stepped up by inflation each year
  • π\pi = Inflation rate a year. It moves insurance, HOA fees and the standard deduction — never rent, which has its own rate
  • RR = Monthly rent at the start, for the home you would take instead of buying
  • grg_r = Rent grows: the annual rate at which the rent climbs, independent of inflation
  • RiR_i = Renter's insurance a month, stepped up by inflation each year
  • csc_s = Costs to sell, as a share of the sale price — agent commission, transfer taxes and the rest
  • τ\tau = Your marginal federal rate, applied only to the deduction that survives the standard-deduction test
  • TyT_y = Property tax paid across year y, capped by the state-and-local-tax limit before it counts as a deduction
  • SyS_y = Standard deduction in year y for your filing status, grown at your inflation rate
  • rr = Investments return: the annual rate earned on whatever cash the cheaper side is not spending
  • gg = Monthly investment return, derived from the annual rate rather than divided by twelve
  • Π\Pi = An investment account. There are two, one per side, and each tracks its own cost basis
Home value compounds from the purchase price, and the owner's bill is rebuilt every month from that value rather than held flat:
V(m)=P (1+a)m/12V(m) = P\,(1+a)^{m/12}
owner(m)=M+PMI(m)+(tp+tm) V(m)12+I (1+π)y−112+H (1+π)y−1\text{owner}(m) = M + \text{PMI}(m) + \frac{(t_p + t_m)\,V(m)}{12} + \frac{I\,(1+\pi)^{y-1}}{12} + H\,(1+\pi)^{y-1}
Property tax and maintenance are shares of the current value, so both climb with the house. Insurance and any HOA fee climb with inflation instead. The renter's side is shorter, and rent has its own growth rate rather than borrowing the inflation figure:
renter(m)=R (1+gr)y−1+Ri (1+π)y−1\text{renter}(m) = R\,(1+g_r)^{y-1} + R_i\,(1+\pi)^{y-1}
Once a year the buyer gets whatever the mortgage-interest deduction is worth, and the test is the one the IRS applies. Deductible interest is capped by the acquisition-debt limit, property tax is capped by the SALT limit, and the total has to beat the standard deduction before a dollar is credited:
Dy=interesty⋅min⁡ ⁣(1, 750,000L)D_y = \text{interest}_y \cdot \min\!\left(1,\ \frac{750{,}000}{L}\right)
by=τ⋅max⁡ ⁣(0, Dy+min⁡(Ty, 40,400)−Sy)b_y = \tau \cdot \max\!\left(0,\ D_y + \min(T_y,\ 40{,}400) - S_y\right)
IRS Publication 936 sets that first cap: for debt secured after December 15, 2017, interest is deductible on the first $750,000 of home acquisition debt, $375,000 if married filing separately. The $40,400 is the state-and-local-tax cap for 2026 written into 26 U.S.C. §164(b)(7), which steps up 1% a year through 2029 and drops back to $10,000 in 2030. A larger loan therefore does not deduct proportionally more, and a large property-tax bill stops helping past the cap.
The difference between the two monthly bills goes into an investment account, on whichever side is paying less that month, compounding at a monthly rate derived from the annual one:
g=(1+r)1/12−1g = (1 + r)^{1/12} - 1
The two accounts start seeded with the difference in upfront cash — $99,000 against $2,400 at the defaults, so the renter's account opens at $96,600 and the buyer's at zero. Each keeps its own cost basis, and capital-gains tax is charged on growth above that basis on whichever side has the growth.
Net worth at month m is then the sale the buyer could make, plus or minus the portfolios:
NWbuy(m)=V(m) (1−cs)−B(m)−taxsale+Πbuy(m)−taxgains,buyNW_{\text{buy}}(m) = V(m)\,(1 - c_s) - B(m) - \text{tax}_{\text{sale}} + \Pi_{\text{buy}}(m) - \text{tax}_{\text{gains,buy}}
NWrent(m)=Πrent(m)−taxgains,rent+depositNW_{\text{rent}}(m) = \Pi_{\text{rent}}(m) - \text{tax}_{\text{gains,rent}} + \text{deposit}
The home-sale tax is the capital-gains rate on any gain above the section 121 exclusion, which 26 U.S.C. §121 sets at $250,000, or $500,000 on a joint return, for a home owned and used as a principal residence for at least two of the five years before the sale. At the default state the gain is nowhere near it, so the charge is zero — but on a long hold with strong appreciation it starts to bite, and it is charged to the buyer for the same reason the renter's portfolio gains are charged to the renter.
Break-even is the first month at which the buyer's figure reaches the renter's. Cash break-even is the same inequality with both portfolios removed: cumulative money out on each side, against the sale at the end. Neither number is rounded before the comparison; money is rounded to the dollar only where it is printed, and every total shown is the sum of the rounded parts beside it.

Where Rent vs Buy Comparisons Go Wrong

  • Reading the cash break-even and stopping there. Money in and money out puts the crossing at 4 years 3 months on the default numbers. Counting what the down payment and closing costs would have earned invested puts it at 8 years. The note under the Cash break-even card calls the first of those the number most calculators publish; read it as an answer about your bank account, and the card beside it as the answer about your net worth.
  • Assuming the mortgage-interest deduction is money. It pays nothing until your itemized deductions clear the standard deduction for your filing status. At the defaults the housing side of that total is $27,974 against a $32,200 threshold, so the deduction is worth zero and a calculator that credits a flat percentage of your interest is inventing a benefit. USAFacts, reading IRS data, puts the share of returns claiming any itemized deduction at 9.5% in 2023.
  • Treating the investment return as a minor assumption. Over the plausible range it moves the crossing further than the mortgage rate does. At 3% it lands at 5 years 10 months, at 7% at 15 years 10 months, and anything from 8% up leaves the break-even card reading Never for the full 30 years. That spread is wider than the answer itself, so a break-even quoted without the return behind it tells you very little.
  • Forgetting what it costs to get out. Six percent of the sale price is $33,207 on a home that has grown to $553,443 in seven years, more than a third of the $90,000 the buyer put down. Drop the selling cost from 6% to 4% and the crossing moves from 8 years to 6 years 4 months; raise it to 8% and it slides to 9 years 5 months. Short holds are punished by this line more than by anything else on the form.
  • Comparing a house you would buy against an apartment you would not rent. The rent figure has to be for a home you would take as the alternative. Ten percent off the rent — $2,160 instead of $2,400 — pushes break-even from 8 years to 14 years 5 months, so an unrealistic rent is not a small error.
  • Counting only the down payment as cash out. Closing costs to buy are 2% by default, $9,000 on a $450,000 house, and they never come back. The reconciliation table opens with $99,000 of upfront cash for the buyer against $2,400 for the renter, and the $96,600 between them is what the renter's investment account starts from.
  • Letting the price-to-rent ratio decide. The default state's ratio is 15.6, on the buying side of the usual 15-to-20 band, and buying still needs eight years to overtake. One snapshot of price against one year of rent cannot see a 15-year loan against a 30-year one, and it says nothing about how fast either of its own two numbers grows.
  • Reading a break-even as a prediction. It is the output of six or seven rates held flat for thirty years. Nobody knows what a house appreciates at over three decades, and the model does not pretend to: the What moves the answer fold prints the range around your own state rather than hiding it.

When to Reach for This Calculator

The question this page answers well is a comparison between two specific options you could take this year: a home at a price you have been quoted, against a lease at a rent you could sign. Both sides need real numbers, and the answer is only as good as the rent you put in.
It earns its keep in four situations. The first is an offer you are about to make, where the question is how long the purchase has to work for. A job or a family that could move you in three to seven years is the second, because that band is where the crossing tends to land and where the answer is least settled. Owners weighing whether to sell and go back to renting are asking the same comparison from the other end, and the page answers it the same way. The fourth is a break-even somebody else quoted you: run your own numbers here and you can see which of the two they meant.
It is the wrong tool in three cases. If the horizon is under two or three years, the transaction costs have already decided it — 2% to buy and 6% to sell is 8% of the price, and no plausible appreciation rate clears that in twenty-four months. If what you need is the monthly payment, the amortization schedule or the effect of an extra payment, the mortgage calculator is the page for that. And if the money in question is going into the market rather than into a house, the future value calculator runs the growth side on its own with deposit timing and compounding frequency as separate controls.
One case sits outside the model entirely. A home bought to rent out is an income property, and none of the arithmetic here applies to it: there is no renter's counterfactual, the tax treatment is different, and depreciation changes the answer. This page assumes you would live in the home, which is also what the section 121 exclusion assumes.

What This Model Does Not Do

Every rate on the form is a constant held for thirty years. Appreciation of 3% means 3% in year one and 3% in year twenty-nine, which is smoother than any real housing market. A run of returns has a sequence as well as an average, and the sequence matters most in the early years when the down payment is largest relative to everything else. The honest way to use a constant-rate model is to run it twice, pessimistically and optimistically, and treat the pair as the answer.
Only federal income tax is modeled. State income tax is absent on both sides, and the states that levy one treat deductions differently enough that any single number here would be wrong for most readers. The alternative minimum tax is absent. So is the income phase-down that 26 U.S.C. §164(b)(7) applies to the state-and-local-tax cap above a threshold, which can reduce that cap toward its $10,000 floor for a high earner. The cap itself is the 2026 figure of $40,400 for every year of the comparison, even though the same statute returns it to $10,000 from 2030.
Utilities, moving costs, commuting and rent control are all outside the form. Some of them fall on both sides and mostly cancel; some of them you could not estimate honestly if asked. Adding an invented constant for owner utilities would move the answer without improving it.
The comparison assumes you sell at the end of the horizon you entered and pays the full selling cost for it. If you would keep the home, that cost never happens and buying looks better than the page says — set costs to sell lower and watch the crossing move. It also assumes one 30-year mortgage held to whatever end you choose: no refinancing, no adjustable rate, no points, no extra payments. Each of those is a real thing people do, and each one is a different question about loan structure rather than about tenure.
The capital-gains treatment is symmetric and simplified. Gains are charged at one long-term rate on whichever side has them, with no bracket interpolation, no net investment income tax, and no account wrapper: money in a 401(k) or an IRA is taxed differently from a brokerage account, and this model does not know which you would use.
Nothing here is financial or tax advice, and the constants carry a date. The standard deduction moves every October when the IRS publishes its inflation adjustments; the figures on this page are the tax-year-2026 ones. The reasons people buy that are not on this form — a school district, a landlord who will not renew, a kitchen you are allowed to change — are real reasons, and no break-even month speaks to any of them.

Rent vs Buy Break-Even — Frequently Asked Questions

How long does it take to break even on a house?
On the numbers this page loads with — a $450,000 home, 20% down at 6.66%, against $2,400 of rent — buying overtakes renting in month 96, which the card shows as 8 years. Counting only money in and money out, with no investment return on either side, the crossing comes at 4 years 3 months. Your own answer will land somewhere else: the mortgage rate, the rent and the investment return each move it by years, not months.

Is it worth buying a house if I'm only staying 5 years?
At the default numbers, no. The crossing is month 96 and a five-year stay stops at month 60, so the verdict card still reads Renting is ahead. Month 51 is where the cash-only comparison flipped, which is why a five-year purchase can look fine on a bank statement and still lose on net worth. Appreciation is the assumption that pulls a five-year buy back over the line fastest, and the worked five-year example on this page runs that change and shows the result.

Why do two rent vs buy calculators give me different break-even years?
Because they are usually measuring different things. Calculator.net reports "Buying is cheaper if you stay for 4.9 years or longer" on its own defaults; Zillow reports a breakeven horizon built on its research methodology; NerdWallet charts a break-even after assuming you itemize. The two big splits are whether the down payment's forgone investment return is counted, which is worth 45 months on this page's defaults, and whether the mortgage-interest deduction is gated against the standard deduction. This page prints both break-evens and labels which is which, so you can tell at a glance which one another tool gave you.

Does the mortgage interest deduction actually save me money?
Only if your itemized deductions beat the standard deduction for your filing status. At the defaults the housing side comes to $27,974 in year one — $23,858 of mortgage interest and $4,116 of property tax — against a 2026 standard deduction of $32,200 for a married couple filing jointly, so the benefit is $0. USAFacts, reading IRS filing statistics, puts the share of returns claiming itemized deductions at 9.5% in 2023, down from 30.6% in 2017, and the mortgage-interest deduction specifically at 7.2% of returns.

Does my filing status change the rent vs buy answer?
Yes. Change nothing but the filing status from married filing jointly to single and break-even moves from month 96 to month 72, two years earlier, because the 2026 standard deduction drops from $32,200 to $16,100 and the mortgage interest starts clearing it.

What investment return should I use for the money I don't put into a house?
The field defaults to 5%, and it is the single input worth most of your attention. Two points either side moves the crossing from 5 years 10 months to 15 years 10 months, and at 8% or above buying never overtakes inside 30 years at these numbers. The helper under the field says to move this one first, and that is why. Use a figure you would be willing to defend for three decades after fees and tax, then run it again two points lower and treat the pair as the answer.

Is a price-to-rent ratio under 15 enough to say buy?
No. The default state's ratio is 15.6 and buying still takes eight years to overtake renting. The ratio compares price with annual rent and takes no view on your mortgage rate, your horizon, or what the down payment could have earned elsewhere.

Does a bigger down payment make buying win sooner?
In this model, yes — but only because the defaults have cash earning 5% while the mortgage charges 6.66%. Halve the down payment from 20% to 10% and the crossing goes from month 96 out to month 145. What is really being compared is two returns, so a reader who would beat their own mortgage rate in the market gets the opposite ranking, and the smaller down payment wins. The down-payment example on this page sets out the whole ladder, from all cash to 10%.

Does the calculator include PMI, and when does it stop?
It charges PMI only while the down payment is under 20%. At 5% down the model bills it for 126 months, about ten and a half years, until the scheduled balance reaches 80% of the original price. At 20% down or more it bills none, whatever number is in the PMI field. When PMI actually comes off a real loan is governed by the Homeowners Protection Act, and lenders differ on what they will do early.

What if I never sell — does the break-even still apply?
The model sells at the end of the horizon you entered and charges the full cost of doing it, $33,207 at the defaults. If you mean to stay put, that charge never lands and the real crossing sits earlier than the card shows; the nearest the form gets to that is a lower Costs to sell, where two percentage points off are worth about twenty months here. The equity card nets out the selling cost as well, so on a never-sell plan read the home value and the mortgage still owed off its subtitle rather than the equity figure itself.

Is this rent vs buy calculator free, and where do my numbers go?
It is free and nothing is stored. The whole model runs in the browser you are reading this in — 360 months, twelve sensitivity re-runs and an amortization schedule, recomputed on every keystroke. Every input you move off its default lands in the query string, which is how a link can carry a scenario without anything reaching a server.

How does this compare with Zillow's or NerdWallet's calculator?
Zillow and NerdWallet have market data this page does not: Zillow can pull a home value and a local rent for you, and NerdWallet publishes national averages in its defaults. What they each publish is one break-even. This page publishes two and says which is which, prints an eleven-row reconciliation in which both columns add to the net-worth figure, and tests your mortgage interest against the 2026 standard deduction for the filing status you picked rather than assuming you itemize — NerdWallet's own methodology states that it assumes buyers can itemize both property tax and mortgage interest. Use a national tool for the inputs and this one for the arithmetic.

I have my break-even year — what should I do with it?
Compare it with how long you expect to stay, and note the distance. A crossing eight years out against a five-year plan is a clear answer; a crossing at five years against a five-year plan is not an answer at all, because the gap is smaller than the error in your assumptions. Then open What moves the answer and find which single input would flip it — if that input is appreciation or the investment return, you are looking at a forecast rather than a calculation. Last, read the deduction line: if it says $0, any advice you have been given about buying for the tax break does not apply to you.

Sources & References

  1. IRS — tax year 2026 inflation adjustments, including the standard deduction figures for single, married filing jointly and head of household
  2. IRS Publication 936 — the $750,000 acquisition-debt cap on deductible mortgage interest
  3. IRS Tax Topic 503 — the SALT (state and local tax) deduction limit; the page itself still prints the 2025 figure of $40,000, and this calculator uses the scheduled 2026 figure of $40,400
  4. 26 U.S.C. §164(b)(7) — the statutory SALT cap year by year: $40,000 for 2025, $40,400 for 2026, then 101% a year through 2029 and back to $10,000 from 2030
  5. 26 U.S.C. §121 — the capital-gains exclusion on the sale of a primary residence: $250,000 single, $500,000 married filing jointly
  6. 12 U.S.C. §4901-4902 — the Homeowners Protection Act: PMI is cancelled on the borrower's written request the month the scheduled balance first reaches 80% of the original value, and terminates automatically at 78%. This calculator models the 80% date
  7. Freddie Mac Primary Mortgage Market Survey — the 30-year fixed-rate average used as this calculator's default mortgage rate
  8. Zillow Research — the breakeven-horizon methodology and the 5% investment-return assumption this calculator's default follows
  9. Ministerio de Hacienda — Tributación Autonómica. Medidas 2026, Capítulo IV: the ITP general rate every autonomous community has legislated, including the six that use progressive scales. Updated 29 April 2026
  10. Real Decreto 1426/1989 — the Spanish notaries' tariff, Number 2 «Documentos de cuantía»: the fee scale on the property value plus the 5% rebate both tariffs order
  11. Real Decreto 1427/1989 — the land registrars' tariff, Number 2 «Inscripciones»: the scale this calculator uses to compute the registry fee instead of guessing a round figure
  12. Texto Refundido de la Ley Reguladora de las Haciendas Locales — art. 72.1 sets the IBI at 0.4%–1.10% of the cadastral value for urban property; art. 107.4 carries the plusvalía coefficients by years held and art. 108.1 caps the municipal rate at 30%
  13. Agencia Tributaria — the savings-income scale that taxes a Spanish home-sale gain: 19% / 21% / 23% / 27% / 30% combined, of which this page shows the state half
  14. Banco de España — real-estate market indicators: the 2.9% average rate on new housing loans and the 2,316 €/m² appraised price behind this calculator's Spanish defaults

Content verified by the Smart Calculators Team