See the true cost of renting vs buying — including investment returns, taxes and selling costs — and find your breakeven year.
Buying and renting look easy to compare at first — just check the monthly payment against the rent, right? Not quite. A mortgage payment is only part of the cost of owning: property tax, insurance, maintenance and HOA fees add up fast, and a big share of your early mortgage payments goes to interest, not equity. On the renting side, the money you did not spend on a down payment and closing costs does not just sit idle — if invested, it can grow. This calculator runs a full month-by-month simulation of both paths and nets everything out into one number: the true cost of each choice over the years you actually plan to stay.
On the buying side, it adds up your down payment, closing costs, mortgage principal and interest, property tax, insurance, maintenance and HOA fees, then subtracts what you would net from selling the home (its appreciated value, minus selling costs and any remaining mortgage balance). On the renting side, it adds up total rent paid (increasing each year), then subtracts the future value of investing your down payment and closing costs — plus any month where renting costs less than buying — at your chosen investment return rate. Whichever net cost is lower is the better financial choice for that time horizon.
The breakeven year is the point where the net cost of buying drops below the net cost of renting, for your specific numbers. It is not a universal number of years — it depends heavily on local rent levels versus home prices (the price-to-rent ratio), your mortgage rate, and how fast rents in your area are rising. In cities with a high price-to-rent ratio (expensive homes, comparatively cheap rent), breakeven can stretch past 10 years. In cities with a low ratio (cheap homes, expensive rent), it can arrive in 2-3 years. Use the reference table below, generated from your own inputs, instead of a generic online rule of thumb.
| Years Staying | Net Cost Buying | Net Cost Renting | Cheaper Option |
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It compares the total net cost of buying a home (down payment, closing costs, mortgage payments, property tax, insurance, maintenance and HOA, minus the net proceeds when you eventually sell) against the total net cost of renting (rent paid minus the investment growth of the money you did not spend on a down payment or higher housing costs).
The breakeven year is the first year in which the net cost of buying drops below the net cost of renting. Before that year, selling costs and upfront closing costs usually make renting cheaper; after it, home equity and appreciation typically make buying cheaper.
Down payment, closing costs, monthly mortgage principal and interest, property tax, home insurance, maintenance, HOA fees, and selling costs (agent commission and closing fees) when the home is eventually sold, net of home appreciation and remaining loan payoff.
If you rent, the cash you would have used for a down payment and closing costs can instead be invested. The calculator grows that amount (plus any month where renting costs less than buying) at your chosen investment return rate, which is the real opportunity cost of tying up cash in a home.
A common rule of thumb is at least 4-7 years, since closing costs (2-5% of price) and selling costs (5-8% of sale price) need time to be offset by equity and appreciation. Your actual breakeven year depends on local rent, home prices and mortgage rates, so use the table on this page instead of a generic rule.
No. This calculator keeps costs pre-tax to stay simple and comparable across users. If you itemize deductions and have a large mortgage, buying may be somewhat cheaper than shown here; for most households the standard deduction makes this effect small.
Try the calculator with a range of appreciation and rent-increase assumptions (for example 2%, 3.5% and 5%) to see how sensitive your breakeven year is. Markets with fast-rising rent favor buying sooner; markets with fast home-price growth but flat rent favor buying later, since the opportunity cost of the down payment falls.
No. US property tax rates range roughly from 0.3% to over 2% of home value per year depending on state and county. A common maintenance budgeting rule is 1% of home value per year, though older homes or houses (vs condos with HOA-covered upkeep) often run higher.
Yes, BreezeCalc is completely free with no sign-up or registration required. All calculations run instantly in your browser and no data is stored or transmitted.