Rent vs. buy calculator: is it cheaper to rent or buy?
Compare the full cost of renting vs. buying over the years you'll stay: mortgage, taxes, insurance, maintenance, selling costs, home price growth, and what your down payment could earn.
The short answer
Whether buying beats renting depends mostly on how long you stay. With a $500,000 home, 20% down, a 7.32% rate (Freddie Mac, week of October 22, 2026), 3% yearly home price and rent growth, and a 5% return on savings, buying costs about $14,830 more than renting at $2,800 a month over 7 years and about $20,885 less over 10 years; it pulls ahead in year 9. Change the inputs to match your market.
How the comparison works
- Cost of buying = down payment + closing costs + every monthly owner cost (principal and interest, property tax, insurance, maintenance) − what you keep when you sell (the home's value after selling costs, minus the remaining loan).
- Cost of renting = every rent payment − what your down payment and closing costs would have earned if invested instead.
The result is the difference in total cost over your stay. Buying usually loses in the first few years because closing costs on both ends are large, then wins as you build equity and rents rise.
What moves the answer most
- How long you stay: the single biggest factor. Short stays favor renting.
- Price-to-rent ratio: in expensive markets where rent is low relative to price, renting stays ahead longer.
- Rate: this week's 30-year average is 7.32% (Freddie Mac); each extra point of rate adds roughly 10% to 12% to the monthly principal and interest.
- Home price growth vs. investment return: faster appreciation favors buying; higher returns on invested savings favor renting.
This calculator leaves out mortgage insurance (use 20% down or add it to maintenance), the mortgage interest deduction, and investing any monthly savings. For the payment itself, use the payment calculator; for a price range, how much house can I afford.
Frequently asked questions
Is it cheaper to rent or buy a house in 2026?
It depends on how long you stay and your local price-to-rent ratio. In the default example ($500,000 home, $2,800 rent, 7.32% rate), buying costs about $14,830 more than renting over 7 years and about $20,885 less over 10; it pulls ahead in year 9.
How many years do you need to stay for buying to make sense?
Often 5 to 10 years, because buying and selling costs are large. Enter your own price, rent and rate to find your break-even year.
What costs does the rent vs. buy calculator include?
Down payment, buying and selling costs, principal and interest, property tax, insurance, maintenance, home price growth, rent increases, and the investment return you give up on the down payment.
Does the calculator include tax deductions?
No. Many households take the standard deduction, in which case the mortgage interest deduction doesn't change the answer. Include it yourself if you itemize.
What return should I use for invested savings?
Use a conservative long-run expectation for how you'd actually invest the down payment. Higher returns favor renting.