Cost of Living Calculator · 2026
Rent vs Buy Calculator
Find out whether renting or buying makes more financial sense for your situation — including the break-even year when buying starts paying off and a full cumulative cost comparison over your planned stay.
—
How to use this calculator
- 1 Enter the home price and your down payment percentage — 20% avoids PMI, but 3–10% is common for first-time buyers.
- 2 Enter the current mortgage rate for a 30-year fixed loan — check your lender or a rate aggregator for today’s rate.
- 3 Enter your monthly rent — what you currently pay or would pay for a comparable rental.
- 4 Set how many years you plan to stay — this is the single most important variable. The longer you stay, the more buying tends to win.
- 5 Your break-even year, monthly cost comparison, and cumulative cost chart appear instantly.
How we calculate this
This calculator models the true cost of both paths — not just the mortgage payment, but all the costs of ownership and the opportunity cost of your down payment.
Buying — Costs Included
Mortgage (P&I)
30-year fixed, standard amortization
Property tax
1.1% of home value annually
Homeowners insurance
0.5% of home value annually
Maintenance & repairs
1.0% of home value annually
Closing costs
3% of purchase price (upfront)
Selling costs
6% of home value at exit
Opportunity cost of down payment
7% annual return if invested instead
Home appreciation
3.5% annually (offsets costs)
Renting — Costs Included
Monthly rent
Your entered amount
Annual rent increase
3% per year
The break-even point is the year when the cumulative net cost of buying falls below the cumulative cost of renting. Before that point, renting has cost you less in total. After it, buying has. The chart shows both lines — where they cross is your break-even year.
What this calculator doesn’t include
For a planning estimate, this is comprehensive — but a few things could shift your real number:
Local property tax rates — the 1.1% default is a national average; actual rates vary from 0.3% (Hawaii) to over 2.5% (New Jersey, Illinois). Enter your local rate manually if you know it.
Mortgage interest tax deduction — homeowners who itemize can deduct mortgage interest, reducing the effective cost of buying. This calculator does not model the tax benefit.
HOA fees — condos and planned communities often charge $200–$600/month, significantly increasing the true cost of ownership.
Renter’s insurance — typically $15–$30/month, a minor cost not included on the renting side.
Local market appreciation — the 3.5% annual appreciation assumption is a national average; your specific market may appreciate faster or slower, dramatically changing the outcome.
Income and lifestyle factors — job stability, flexibility to relocate, and quality of life considerations are not financial variables but often matter more than the numbers.
Frequently asked questions
The break-even point — when buying becomes cheaper than renting on a cumulative basis — typically falls between 3 and 7 years depending on your local market, mortgage rate, and rent level. The main reason buying takes time to pay off is upfront costs: a 3% closing cost on a $350,000 home is $10,500 that you need to recoup through equity building and avoided rent increases before buying comes out ahead. In high-cost markets with fast appreciation, the break-even can be shorter. In slower markets with low rents, it can exceed 10 years.
The buying side includes mortgage principal and interest (30-year fixed), property tax (1.1% of home value annually), homeowners insurance (0.5%), maintenance (1.0%), closing costs (3% upfront), and selling costs (6% at sale). PMI is included if your down payment is under 20%. The calculator also accounts for the opportunity cost of your down payment — what that money would earn if invested at 7% annually instead. The renting side includes your monthly rent with a 3% annual increase. Home appreciation is modeled at 3.5% annually as an offset to buying costs.
It depends entirely on your local market, how long you plan to stay, and your financial situation — there is no universal answer. In markets where home prices are high relative to rents, buying often takes longer to break even. In markets with low home prices relative to rents and strong appreciation, buying can pay off quickly. The most important variable is how long you plan to stay. If you’re staying fewer than 3 years, renting almost always wins. If you’re staying 7 or more years, buying usually wins. Use this calculator with your specific numbers to find your break-even point.
The 5% rule is a simple comparison: multiply the home price by 5%, divide by 12, and compare to your monthly rent. If your rent is lower than that figure, renting is likely the better financial choice. The 5% represents the approximate annual unrecoverable cost of homeownership — roughly 1% property tax, 1% maintenance, and 3% cost of capital on the home’s value. For a $400,000 home, the 5% threshold is $1,667/month. If rent for a comparable property is under $1,667, renting wins on a pure cost basis. This calculator applies more detailed math, but the 5% rule is a useful quick check.
It is a reliable planning estimate using nationally averaged assumptions: 1.1% property tax, 0.5% insurance, 1.0% maintenance, 3% closing costs, 6% selling costs, 3.5% home appreciation, 3% annual rent increases, and 7% investment return on the down payment. Your actual results will differ based on local property tax rates, your specific maintenance costs, and actual appreciation in your market. For a more precise analysis of a specific home purchase, consult a financial advisor or real estate professional who can apply your local data.