Buying wins eventually in most markets. This finds the year it starts winning in yours.
Break-even: year 18
18 years
When buying overtakes renting on total net position.
At 7 years you would be $140,128 behind by buying. Transaction costs are the reason: roughly $12,750 to buy and $37,850 to sell consume the early appreciation entirely. If there is a real chance you move before year 18, renting is the lower-risk financial choice.
A ratio under 15 means homes are inexpensive relative to rents, which is the classic signal that buying makes sense. Much of the Midwest and South sits here. Ownership costs are close to or below rent from day one, so you are not relying on appreciation to come out ahead.
Your $76,500 of upfront cash would grow to roughly $209,192 over 7 years if invested at 7% instead. That is the largest single item working against buying, and it is the one most rent-versus-buy comparisons quietly leave out.
Model the invested alternativeOwning this home would cost roughly $3,023 a month before maintenance, against $2,400 in rent. Even when buying wins long term, it has to be affordable month to month first.
Full payment breakdownWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
A balanced mid-market comparison where the buyer expects to stay well past the typical break-even point.
Break-even: year 18
18 years
At 7 years you would be $140,128 behind by buying. Transaction costs are the reason: roughly $12,750 to buy and $37,850 to sell consume the early appreciation entirely. If there is a real chance you move before year 18, renting is the lower-risk financial choice.
A ratio under 15 means homes are inexpensive relative to rents, which is the classic signal that buying makes sense. Much of the Midwest and South sits here. Ownership costs are close to or below rent from day one, so you are not relying on appreciation to come out ahead.
Your $76,500 of upfront cash would grow to roughly $209,192 over 7 years if invested at 7% instead. That is the largest single item working against buying, and it is the one most rent-versus-buy comparisons quietly leave out.
Model the invested alternativeAn expensive coastal market where a short expected stay makes renting the stronger choice.
Renting wins long term
40+ years
With these numbers, buying never catches up. That usually means the price-to-rent ratio is very high — a $850,000 home against $3,400 rent is a ratio of 20.8, and anything above roughly 21 makes renting mathematically difficult to beat. Renting and investing the difference is the stronger financial choice here, though it does not account for the stability and control that owning provides.
Between 15 and 21, neither renting nor buying has a decisive structural advantage. The decision comes down to how long you will stay and how much you value stability against flexibility.
Your $195,500 of upfront cash would grow to roughly $391,417 over 4 years if invested at 7% instead. That is the largest single item working against buying, and it is the one most rent-versus-buy comparisons quietly leave out.
Model the invested alternativeA Midwest market where ownership costs sit close to rent from the start and buying wins quickly.
Break-even: year 12
12 years
At 10 years you would be $16,199 behind by buying. Transaction costs are the reason: roughly $7,350 to buy and $23,048 to sell consume the early appreciation entirely. If there is a real chance you move before year 12, renting is the lower-risk financial choice.
A ratio under 15 means homes are inexpensive relative to rents, which is the classic signal that buying makes sense. Much of the Midwest and South sits here. Ownership costs are close to or below rent from day one, so you are not relying on appreciation to come out ahead.
Your $31,850 of upfront cash would grow to roughly $109,212 over 10 years if invested at 7% instead. That is the largest single item working against buying, and it is the one most rent-versus-buy comparisons quietly leave out.
Model the invested alternativeThe phrase treats rent as pure waste and mortgage payments as pure savings. Neither is accurate. In the first decade of a 30-year mortgage, the majority of each payment is interest — money that goes to the lender and builds no equity, functionally the same as rent.
Add property tax, insurance, maintenance and the roughly 8–10% combined cost of buying and selling, and a substantial share of homeownership spending never becomes equity either. The honest comparison is not rent versus mortgage payment; it is total unrecoverable cost of renting versus total unrecoverable cost of owning, with the down payment's foregone investment return counted on the owning side.
Divide the purchase price by annual rent for a comparable property. The result places a market on a rough spectrum: under 15 favors buying, 15 to 21 is balanced, and above 21 favors renting.
The ratio works because it captures in one number what would otherwise require modeling a dozen variables. A ratio of 30 means ownership costs will substantially exceed rent for years, so the case for buying rests almost entirely on appreciation — which is a forecast, not a fact.
Buyers routinely omit maintenance, which runs around 1% of home value annually and more on older properties, and the roughly 7% cost of selling. Renters routinely omit that rent rises every year while a fixed mortgage payment does not — after fifteen years of 3.5% increases, a $2,400 rent becomes about $4,020 while principal and interest stay flat.
The single largest omitted item is the opportunity cost of the down payment. A $65,000 down payment plus $13,000 in closing costs invested at 7% becomes roughly $125,000 after ten years. Any comparison that ignores this systematically overstates the case for buying.
Owning provides control and stability that a spreadsheet cannot price: no lease non-renewal, no landlord selling the building, freedom to renovate, and a fixed housing cost that inflation erodes over decades. For a family settling near a specific school, that stability can be worth more than a modest financial edge.
Renting provides mobility and freedom from repair risk. If a career change might mean relocating, or if a $15,000 roof replacement would be genuinely destabilizing, renting is buying an option that has real value. Neither answer is universally correct — but knowing the size of the financial gap tells you how much you are paying for the option you prefer.
Excluding property tax, insurance, PMI and maintenance understates ownership costs by 30–50%.
Cash tied up in equity is cash not compounding elsewhere. Over a decade this is frequently the largest single term in the comparison.
Extrapolating a hot market's recent gains into a 10-year forecast is how buyers talk themselves into stretching. Model 3% and check whether the answer survives.
Agent commissions and closing costs on the sale run roughly 6–8% of the sale price and are incurred at exactly the moment you realize the gain.
Renters comparing today's rent to today's mortgage payment miss that only one of those numbers is fixed for 30 years.
Commonly around five years, but the real range spans three to over fifteen depending on your market. Transaction costs of roughly 8–10% combined must be recovered through appreciation and principal paydown. In low price-to-rent markets the break-even can arrive in three years; in expensive coastal markets it can exceed a decade.
No, deliberately. Since the standard deduction roughly doubled in 2018, around 90% of filers take it and receive no incremental benefit from mortgage interest. Including it would overstate the case for buying for the large majority of users. If you itemize because of a large loan and high state taxes, the true benefit is only the amount by which your itemized total exceeds the standard deduction.
Long-run US home price growth has been roughly 3–4% nominally, close to inflation plus a small margin. Using a higher figure because your market has recently outperformed is the most common way to make this calculator say what you want it to say. Try 3% and see whether the conclusion holds — if buying only wins at 6% appreciation, the case is thinner than it appears.
Yes, if the property has them — add them to the maintenance assumption, since they cover similar costs. HOA dues of $400 a month are $4,800 a year that never builds equity and typically rise faster than inflation. On a condo they can single-handedly reverse the conclusion.
No. In very high price-to-rent markets, renting and consistently investing the difference can beat buying even over 30 years. The catch is the word consistently — the financial case for renting depends entirely on actually investing the savings rather than spending them, and a mortgage enforces savings automatically in a way that requires no discipline.
The next calculations that usually follow this one.
See principal, interest, taxes, insurance and PMI — then what the loan really costs over 30 years.
Two answers: what a lender will approve, and what your budget can genuinely sustain.
See the balance, the split between contributions and growth, and what it actually buys.
Sized on essential expenses and your actual risk profile — not a generic three-to-six months.
One number that tells you whether the whole plan is working — plus what is actually spendable.
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