Rent vs. Buy Calculator — True Cost of Homeownership

This calculator includes mortgage principal and interest, property tax (as % of home value), home maintenance (typically 1-2% of value annually), homeowners insurance, HOA fees, and the opportunity cost of your down payment — what you could have earned by investing it instead.

If you put $60,000 down on a home, that money is no longer available for investment. The opportunity cost is what that $60,000 would have grown to in a diversified investment portfolio over your analysis period. This is a hidden cost of homeownership often overlooked.

Home appreciation increases your equity over time, which is a key financial benefit of buying. Historically, US homes have appreciated at 3-4% annually on average. Higher appreciation favors buying; lower appreciation favors renting.

Homeowners who itemize deductions can deduct mortgage interest from taxable income. Enter your marginal tax rate and the calculator will estimate this benefit. Note: since the 2017 Tax Cuts and Jobs Act raised the standard deduction, fewer homeowners benefit from itemizing.

Generally, buying becomes financially advantageous after 5-7 years in the same home, though this varies widely by market. Use the break-even year in our results to see your specific number. Transaction costs (closing costs, agent fees) need time to be recouped.