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Rent vs buy calculator

How long do you have to stay before buying wins? Enter both sides and a holding period to see where the two lines cross.

Over 7 years

Rentsaves $12,849

Staying 7 years, renting costs $12,849 less, counting closing costs, 7% to sell, and what the $85,000 down payment would have earned. Owning becomes the cheaper path in year 9.

Staying 7 years, renting costs $12,849 less, counting closing costs, 7% to sell, and what the $85,000 down payment would have earned. Owning becomes the cheaper path in year 9.

Total cost of each path if you leave at the end of that year

30 years
$0$500k$1.0MYear 9: owning gets cheaper151015202530
  • Renting$1,370,172
  • Owning, after sale$787,671

The math, with your numbers

Owning, monthly$3,156Principal and interest + taxes, insurance, upkeep ÷ 12$2,262 + $10,725 ÷ 12
Cash at closing$97,750Down payment + 3% closing costs$85,000 + $12,750
Forgone return, 7 yr$39,794Cash at closing × ((1 + return)^7 − 1)$97,750 × ((1 + 5%)^7 − 1)
Equity if sold, year 7$176,206Home value × (1 − 7% selling costs) − loan balance$522,696 × 0.93 − $309,901
Owning, 7 yr total$233,528Cash at closing + payments + taxes, insurance, upkeep + forgone return − equity$97,750 + $190,010 + $82,180 + $39,794 − $176,206
Renting, 7 yr total$220,679Rent × 12, growing 3% a year, summed over 7 years$28,800 × ((1 + 3%)^7 − 1) ÷ 3%

Closing costs are fixed at 3% of price and selling costs at 7% of the sale price. Principal paydown is not a cost here. It comes back as equity when you sell. At 0% growth the chart shows the decision without an appreciation forecast.

Calculated on September 30, 2026 at realestatecalculations.com (Rent vs buy calculator). Every figure above comes from the inputs listed on this page.

Reopen these exact numbers: https://www.realestatecalculations.com/calculators/rent-vs-buy/?price=425000&down=85000&rate=7&owncost=10725&rent=2400&growth=3&invest=5&years=7

How this calculator works

The comparison is not payment against payment. Buying costs the mortgage, property taxes, insurance, and maintenance, plus the opportunity cost of the down payment. Renting costs rent plus whatever that unspent down payment earns invested elsewhere. The output that matters is a break-even holding period: the year cumulative ownership cost drops below cumulative rental cost.

Transaction costs are what push break-even out. Closing costs on the way in run a few percent of price, and selling costs run roughly 6% to 9% once commission and transfer taxes are counted. On a $425,000 purchase that is somewhere around $25,000 to $38,000 of round-trip friction to absorb before ownership starts winning.

Key insights

  • Short holds favor renting almost regardless of the other inputs, because transaction costs land entirely in the first and last year. Any version of this comparison showing buying ahead in year one has left selling costs out of the model.
  • The opportunity cost of the down payment is the line most comparisons skip. $85,000 left invested rather than committed to a purchase compounds over the same period, and omitting it flatters ownership by the entire return on that capital.
  • Maintenance is an annual cost renters do not carry, and it does not vanish because it went unspent this year. A roof consumed over 25 years accrues whether or not it lands in a given year’s budget.
  • The answer is highly sensitive to the appreciation rate and the mortgage rate, and neither is knowable in advance. Running the comparison across a range rather than a single point is what separates a robust conclusion from an artifact of one assumption.

Frequently asked questions

How long do I need to own before buying beats renting?›

Long enough to amortize round-trip transaction costs of roughly 8% to 12% of price, which puts typical break-even in years rather than months. The exact year depends on the spread between rent and ownership cost, the appreciation rate, and what the down payment would have earned invested.

Is renting throwing money away?›

Interest, taxes, insurance, and maintenance are money spent on housing too, and none of them build equity either. The honest comparison is total cost against total cost, with only principal paydown and appreciation counted as ownership gains.

Does the calculator account for the down payment I did not invest?›

It should, and this one does. Committing $85,000 to a purchase means forgoing what that capital would have returned elsewhere, and leaving it out is the single most common way a rent versus buy comparison tilts toward buying.

What appreciation rate should I assume?›

Whichever one you use, run the comparison at zero as well. The zero case shows what the decision looks like on cash and paydown alone, and if buying only wins on an appreciation assumption, that is worth knowing before signing.

How do selling costs affect the result?›

They are the reason break-even exists. Commission and transfer taxes of 6% to 9% on a $425,000 sale is $25,500 to $38,250, paid at exit, and every year of ownership spreads that cost a little thinner.

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