Rent vs. Buy Calculator Decide whether renting or buying makes more financial sense — with 2025 benchmarks, break-even an...
Rent vs. Buy Calculator
Decide whether renting or buying makes more financial sense — with 2025 benchmarks, break-even analysis, and equity projections.
Buyer’s Total Cost** = Mortgage P&I + Tax + Insurance + Maintenance + HOA − Principal Paydown − Appreciation
Renter’s Total Cost** = Rent + Renter’s Insurance − Investment Returns on Savings
Example** ($2,200/mo rent vs. $427K home, 10% down, 6.8% rate): • Year 5: – Renter net worth: +$32,200 (invested $400/mo savings @ 6.5%) – Buyer net worth: −$18,400 (equity $42K − interest $60K) • Year 10: – Renter: +$78,300 – Buyer: +$64,100 (equity $128K − interest $89K + $25K appreciation) → **Break-even: 7.3 years**
✅ Pro Tip**: Calculate **price-to-rent ratio** = (Home Price ÷ 12) / Monthly Rent • <15: Strong buy • 15–20: Neutral • >20: Strong rent
⚠️ Avoid these costly mistakes:
- Ignoring maintenance** — $4,270/yr (1% of $427K) not in budget
- Short time horizon** — <3 years = almost always rent (transaction costs = 6–10% of sale)
- Overestimating appreciation** — 10% in 2021 ≠ long-term average (3–4.5%)
- Underestimating tax benefits** — Mortgage interest + property tax deduction saves $2,100/yr (24% bracket)
✅ Smart Buyer/Renter Strategies**:
- Use house hacking: Buy duplex, live in 1 unit, rent other → break-even in <3 yrs
- Track **net worth**, not cash flow — equity builds silently
- If renting: automate investing of savings difference
| Metric | Strong Buy | Neutral | Strong Rent |
|---|---|---|---|
| Price-to-Rent | <15 | 15–20 | >20 |
| Time Horizon | >7 yrs | 4–7 yrs | <4 yrs |
| Appreciation | >5% | 3–5% | <3% |
📉 Break-Even Scenarios** ($2,200/mo rent, $427K home):
- 3% appreciation: **7.3 years**
- 5% appreciation: **5.1 years**
- House hacking (+$600/mo rent): **2.8 years**
- 15% down: **6.0 years** (lower mortgage interest)
➡️ Standard Comparison
“$2,200/mo rent vs. $427K home — when does buying win?” → **7.3 years**
➡️ Break-Even
See exact month when home equity + appreciation > rent savings + investments.
➡️ Appreciation Impact
Model low/base/high scenarios — 2% vs. 6% appreciation shifts break-even by 3.2 years.
➡️ Opportunity Cost
“I save $400/mo renting — what’s that worth in 10 yrs?” → **$66,520 @ 6.5%**
Note: Uses 2025 FHFA, BLS, and Freddie Mac data. Maintenance = 1%, tax = 1.2%, insurance = 0.35%. Assumes fixed-rate mortgage, no prepayment penalties.