Renting
Buying
Assumptions
What the renter earns by keeping the down payment and closing costs invested instead.
Agent commissions, transfer taxes, and prep — the cost of cashing the equity out.
Ledger reads
Comparison$0
difference over the horizon
- Renting, total net cost
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- Buying, total net cost
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- Monthly P&I payment
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- Buying breaks even
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- Equity at sale, after costs
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- Cash needed up front
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How this comparison is built
The renting side adds up every rent payment over your horizon (growing each year), then subtracts the investment gains the renter earns by keeping the down payment and closing costs invested instead of locked in a house. That last part matters: a buyer's cash down isn't free, it has an opportunity cost.
The buying side adds up the down payment, closing costs, every mortgage payment, property tax, insurance, maintenance, and HOA dues over the same horizon — then subtracts what you'd walk away with if you sold at the end: the home's appreciated value, minus selling costs, minus whatever's still owed on the loan. What's left is the true net cost of having owned.
The breakeven year is when buying's net cost first drops below renting's. Short stays almost always favor renting, because closing and selling costs get spread over too few years — that's why the horizon field changes the answer more than almost anything else.
Why does buying look bad for short stays even when rent is high?
Transaction costs. Buying costs roughly 3% going in and 7% or more coming out — around 10% of the home's value that has nothing to do with living there. Stay two years and that's 5% of the price per year, which rent rarely beats. Stay ten years and it fades to noise.
Doesn't this ignore tax deductions for homeowners?
Deliberately, yes. Since the standard deduction was raised, most homeowners no longer itemize, so the mortgage-interest deduction saves them nothing. If you know you'll itemize, the comparison here understates buying slightly — treat it as a conservative baseline.
What appreciation and investment numbers should I use?
Long-run US home prices have grown a little above inflation on average, but with big regional swings; broad stock-market returns have historically been higher, with more volatility. The honest move is to test a range — the defaults here are moderate, and dragging appreciation up or returns down (or vice versa) shows you how sensitive the answer is.
This tool is for general planning purposes only and isn't financial, legal, or lending advice. It can't model your local market, taxes, or life plans — a real decision deserves real quotes and local numbers.