Dollars World

Borrow & repay

Rent vs Buy Calculator

Is it better to rent or buy a home?

Updated Free, no sign-upRuns in your browser

$
$/mo
%
%
7 years
Costs of owning
Loan term
% of value
$
$
% of value
% of loan
Only with less than 20% down.
% of price
Your Loan Estimate lists them.
% of sale price
Agent commissions, transfer taxes and fees.
Growth and returns
% a year
% a year
% a year
What your savings earn if they're not in the house.
% a year
Raises insurance and HOA fees over time.
$/mo

Renting comes out ahead by

$32,661

After 7 years, compared with buying this home and selling it then.

Buying wins if rent is above
$2,490/mo
Buying pulls ahead after
17 years
Your wealth if you buy
$171,217
Your wealth if you rent
$203,878
Owning costs, first month
$2,958
Cash needed to buy
$92,000

Wealth is what you'd have after selling the home (buy) or in investments (rent). Both sides spend the same each month; the cheaper side invests the difference.

Rent vs Buy Calculator by Dollars World ·Open the full version

Your wealth over 30 years

If you buy (and sell that year)If you rent and invest
Year by year
YearIf you buyIf you rentRent

How it works

Comparing a mortgage payment with rent isn't enough. Owning also means property tax, insurance, maintenance and big one-off costs to buy and sell. Renting means your down payment stays invested instead. So the calculator follows both paths month by month:

  • If you buy, you pay the mortgage, tax, insurance, maintenance and any HOA and PMI. The home's value grows, and your loan shrinks.
  • If you rent, the down payment and closing costs you didn't spend are invested from day one, and your rent rises each year.
  • Each month, whichever path costs less invests the difference, so both paths spend exactly the same money.

Buy: home value − selling costs − loan left + investments

Rent: investments

The side with more wealth at the end wins. The break-even rent is the monthly rent at which the two come out equal over the years you'll stay.

Worked example

A $400,000 home with 20% down at 6.9%, against renting a similar home for $2,200 a month. Owning costs about $2,958 in the first month once tax, insurance and 1% a year of maintenance are counted.

If you stay 7 years, with home prices and rent both rising 3% a year and investments returning 6%, renting leaves you about $32,661 better off. Buying would win if the rent were above $2,490 a month.

Over the long run the picture changes: buying pulls ahead after 17 years. And at $2,800 rent, buying comes out $34,829 ahead after 7 years.

What tips the balance

  • How long you stay. Buying and selling costs are paid once, so they weigh heavily on a short stay and fade over a long one.
  • The price-to-rent gap. Where homes cost many years of rent, renting tends to win. Where rents are high compared with prices, buying does.
  • Mortgage rates. A higher rate raises the cost of owning month after month; see how it moves your payment in the mortgage calculator.
  • Growth assumptions. Home prices rose 2.1% in the year to mid-2026 on FHFA's national index, and local markets vary widely. Try a few values: small changes compound over the years.

Questions people ask

Is rent just money thrown away?

No more than mortgage interest, property tax and maintenance are. Both paths have costs you never get back. Rent buys you a home and flexibility; owning buys you a home and a leveraged bet on its price. This calculator counts both honestly.

What does it leave out?

Taxes on investment gains and home sale profits, and the mortgage interest deduction, which most households don't itemize for. It also assumes the renter really invests the difference; if you wouldn't, buying works as a kind of forced saving.

How much house can I afford?

Try the home affordability calculator. It works back from your income and debts to the highest price that fits.

Sources

Reviewed September 26, 2026 by The Dollars World team. How we build and check our calculators · Our data and formulas. This is general information, not financial advice.

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