Rent vs. Buy Calculator
The honest answer to "should I buy?" is almost always "how long will you stay?" This finds your break-even year — including the costs most comparisons quietly leave out.
If you rent
If you buy
Break-even point
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| After | Cost of renting | Cost of owning | Difference |
|---|
"Cost of owning" is total cash out plus lost investment returns, minus the equity you would walk away with after selling. Taxes on either path are excluded.
Why the Answer Is Almost Always "How Long?"
Buying front-loads enormous one-time costs. You pay roughly 2–5% of the price to get in, and 7–10% to get out. On a $350,000 home that is around $10,000 on the way in and $28,000 on the way out — nearly $40,000 that buys you no housing at all.
Those costs are recovered only through years of appreciation and principal paydown. That is why the break-even year, not the monthly payment, is the number that should drive the decision. A mortgage payment lower than rent means very little if you sell in two years.
The Cost Everyone Forgets
Opportunity cost on the down payment. A $70,000 down payment invested at 6% instead would be worth about $125,000 after ten years. Any comparison that ignores this flatters buying badly — and most do. The field above lets you set it honestly.
What Tilts It Each Way
Renting wins when
- You may move within ~5 years
- Prices are high relative to rents
- Mortgage rates are high
- You would invest the difference
- Your job or city is uncertain
Buying wins when
- You will stay many years
- Rents are rising quickly
- You locked a low fixed rate
- You want stability and control
- You would not invest the difference anyway
Treat the Output as a Range
Three inputs dominate the result and none can be known in advance: home appreciation, rent growth, and investment returns. Move appreciation by two points and the break-even year shifts substantially. Run it at optimistic, pessimistic, and neutral assumptions — if buying only wins under the optimistic case, that is the real finding.
Related Calculators
rent affordability calculator · rent vs. sell calculator · moving cost calculator · cap rate calculator
Buying It to Rent Out?
If the plan is to rent the place rather than live in it, the cap rate and cash-on-cash calculators are the right tools — and Kelpic handles everything after the keys change hands.
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