Rent vs Buy Calculator
Compare the true financial cost of renting versus buying a home over time.
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Frequently Asked Questions
Is it better to rent or buy a home?
It depends on timeline, finances and market. Buying is better if you plan to stay 5+ years, can afford a 10-20% down payment, and home prices are reasonable relative to rents. Renting is better for flexibility, expensive markets (NYC, SF) and when you lack a down payment or have high debt.
What is the price-to-rent ratio?
The price-to-rent ratio compares home prices to annual rents. Divide home price by annual rent. A ratio below 15 favors buying; 15-20 is neutral; above 20 favors renting. In San Francisco the ratio exceeds 40, strongly favoring renting. In many Midwest cities it is below 15, favoring buying.
How long do you need to stay to make buying worth it?
The break-even point for buying vs renting is typically 3-7 years depending on transaction costs, mortgage rate and market appreciation. The 5-year rule suggests staying at least 5 years to recoup transaction costs (real estate agent fees, closing costs, moving). Shorter stays usually favor renting.