Comparing a mortgage payment to a rent check tells you almost nothing. This calculator compares the net cost of both paths over the years you actually plan to stay: every dollar out, minus every dollar you get back at the end. The number that decides the question is where the two lines cross.
The rent-versus-buy argument usually gets settled with two numbers: the mortgage payment and the rent check. On the defaults here that is $2,118 against $1,900, and the mortgage looks barely more expensive. The comparison is broken because the two payments buy completely different things. Part of the mortgage payment retires debt, which converts into cash when the home is sold. None of the rent payment does. Meanwhile the buyer hands over $92,000 on day one and the renter keeps it.
Net cost is the honest frame. Add up every dollar each path takes out of your pocket across the years you actually stay, then subtract what each path is worth at the end. For the buyer, what it is worth at the end is the sale price minus selling costs minus the remaining loan balance. For the renter, it is the investment growth on the cash that never went into a down payment. Whichever path leaves you poorer is the expensive one, regardless of what the monthly bills look like.
Three data points frame the decision right now, and they point in different directions.
Financing is expensive. Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed rate at 6.95% on September 17, 2026, up from 6.76% the week before and 6.26% a year earlier. A rate near 7% is the single largest drag on the buy side of this calculation, because it raises both the payment and the interest that never becomes equity.
Renting has gotten softer. Realtor.com's June 2026 Rent Report found the median asking rent across the 50 largest metros at $1,692, down 1.5% year over year and the 35th consecutive month of annual declines, though still 16.4% above pre-pandemic levels. Apartment List's August 2026 report put the national median at $1,390 with the vacancy rate easing to 7.1% from a February peak of 7.3%. A multifamily construction boom delivering more than 600,000 units in 2024, the most since 1986, is the reason. Landlords competing for tenants cannot raise rents the way they did through 2022.
Home prices kept climbing anyway. The FHFA House Price Index has averaged roughly 4.3% a year since 1975, and the St. Louis Fed notes an average of 5.1% annually since 1976 against 3.7% inflation. That is the counterweight: the asset you are buying has historically grown faster than the cost of the money used to buy it. This calculator defaults to 3.5%, deliberately below the long-run average, because planning on the historical mean is how people end up house-poor.
The variables, in plain terms. Down % sets the loan amount and also decides whether PMI applies. The mortgage rate is the rate on the note, not the APR, so add roughly 0.2 to 0.3 points if you want to include lender fees in the payment. Property tax, insurance, and maintenance are entered as percentages of home value and are charged monthly, which matters because they drift upward with the home's assessed value instead of staying flat for 30 years like the principal and interest. PMI is charged monthly only while the balance sits above 80% of the original price, which is why it disappears partway through a low-down-payment scenario on its own. Closing costs and cost to sell are one-time transaction costs at each end of the ownership. The investment return applies only to the upfront cash a renter keeps, and the home appreciation rate compounds monthly.
$400,000 home, 20% down, 6.95% for 30 years, staying seven years. The loan is $320,000, so principal and interest run $2,118.23 a month. Add the first month of property tax at $304, insurance at $160, and maintenance at $334, and the real cost of owning in month one is $2,917, not $2,118. Renting the same kind of home costs $1,900 plus $20 of renter's insurance, $1,920.
Seven years later the home is worth $508,912, but the loan balance is still $291,444, because $149,376 of the payments went to interest. Selling at an 8% cost nets $176,755. Against that, the buyer has put out $92,000 upfront and $345,705 in total cash. Buy net cost lands at $168,951.
The renter paid $176,384 in rent over the same seven years, which is more than the buyer's net cost, but the renter still holds the $92,000 the buyer spent. Invested at 5%, it earns $37,453. Rent net cost is $138,931. Renting comes out $30,020 ahead.
Nothing in that result is a verdict on homeownership. It is a verdict on buying at 6.95% and selling after seven years, which is the worst realistic combination: high financing cost paid for only a short time.
Hold every default assumption fixed and vary only how long you stay. The advantage column is rent net cost minus buy net cost, so a negative number means renting won. The same break-even instinct follows you into ownership: if rates fall after you buy, the refinance break-even calculator prices how long you must stay in the home for the cheaper loan to cover its own closing costs.
| Years stayed | Buy net cost | Rent net cost | Advantage |
|---|---|---|---|
| 1 | $62,997 | $18,440 | −$44,557 |
| 3 | $99,934 | $56,691 | −$43,243 |
| 5 | $135,317 | $96,830 | −$38,487 |
| 7 | $168,951 | $138,931 | −$30,020 |
| 10 | $215,631 | $205,918 | −$9,712 |
| 15 | $281,100 | $328,394 | +$47,294 |
| 20 | $326,427 | $465,341 | +$138,914 |
| 30 | $324,484 | $786,301 | +$461,817 |
The crossing point sits in year 12. Three observations follow from the shape of that table. First, the gap barely moves between year one and year five, because five years of a 30-year amortization is mostly interest. Second, the cost of a short stay is front-loaded and specific: it is the $12,000 of closing costs plus roughly 8% of the sale price, and neither is recoverable. Third, the 30-year row shows why the long view is so lopsided. Once the loan is retired, the buyer's net cost essentially freezes at $324,484 while the renter's keeps compounding at 3% a year, all the way to $786,301.
The default result is not robust, and pretending otherwise would mislead. Stress-testing each assumption separately shows which ones carry the decision.
| Input changed | Advantage at 7 years | Break-even |
|---|---|---|
| Mortgage rate 5.50% | +$2,523 | 7 years |
| Mortgage rate 6.26% (a year ago) | −$14,481 | 9 years |
| Mortgage rate 6.95% (default) | −$30,020 | 12 years |
| Mortgage rate 7.50% | −$42,462 | 14 years |
| Appreciation 0% | −$121,365 | 30 years |
| Appreciation 2% | −$71,568 | 21 years |
| Appreciation 5% | +$15,438 | 6 years |
| Rent growth 0% | −$45,124 | 24 years |
| Rent growth 5% | −$19,086 | 9 years |
| Cost to sell 6% | −$19,842 | 10 years |
| Cost to sell 10% | −$40,198 | 13 years |
| 10% down instead of 20% | −$45,008 | 13 years |
Appreciation dominates everything. Moving it from 3.5% to 5% is worth about $45,000 over seven years, larger than the effect of any other single input, and it is the one variable no buyer controls or can forecast. The mortgage rate is the second lever and the only one that is partly negotiable today. Rent growth matters in the opposite direction from what intuition suggests: slower rent growth makes buying relatively worse, because the renter's costs stay low while the owner's taxes, insurance, and maintenance keep climbing with home value.
The 10% down row deserves its own note. Halving the down payment costs $12,600 of PMI across seven years, raises the payment from $2,118.23 to $2,383.01, and pushes break-even out a full year. The lower down payment is not free money. It is a higher price paid in monthly installments.
Any projection this simple has biases, and you should know which way they lean.
It is too kind to buying. The renter is credited with investment gains only on the upfront cash. In the early years, owning costs about $997 a month more than renting on the defaults, and a strict model would hand that difference to the renter to invest as well. Doing so moves the break-even later than year 12. The model also ignores the mortgage interest deduction entirely, which understates the buyer's position for households that itemize. And it assumes a disciplined renter who actually invests the down payment rather than spending it, which is an assumption about behavior, not arithmetic.
It is too kind to renting in other ways. A landlord's rent increase is a permanent raise in your cost of living and a moving truck is your only defense. A fixed-rate mortgage payment is frozen for 30 years while wages and rents rise around it, and that hedge against inflation is real but invisible in a seven-year window. Renters also absorb the disruption of lease non-renewals and the cost of moving, neither of which appears here.
None of it changes the arithmetic. It changes what you should do with it, which is to treat the result as a range rather than a verdict, and to notice how sensitive it is to an appreciation rate you cannot know in advance.
Set the years field to the shortest stay you would genuinely accept, not the one you hope for. Job changes, relationships, and children move people far more often than they expect, and 8% of a sale price is a brutal tax on being wrong about that.
If the down payment is the hurdle, work out the monthly deposit that gets you there with the savings goal calculator before you start shopping, and keep that money somewhere liquid rather than a long-lock product. Once you own, the fastest way to improve the arithmetic is to shorten the loan, and the mortgage payoff calculator shows what extra principal does to the term and the interest bill. Finally, remember that every number here is nominal. The inflation calculator converts the 15-year and 30-year outcomes into today's purchasing power, and the picture changes: a $786,301 rent bill spread across 30 years is less terrifying in real terms than it looks, and so is a $324,484 net cost.
Longer than most people expect, and the answer moves with mortgage rates. At the default assumptions here, a $400,000 home with 20% down at the 6.95% average rate Freddie Mac reported on September 17, 2026, break-even arrives in year 12. Drop the rate to 5.5% and it arrives in year 7. Raise it to 7.5% and it slides to year 14. The transaction costs of getting in and out, roughly 3% to buy and 8% to sell, are what push the date out.
Because a mortgage payment buys an asset and rent does not. Principal repayment builds equity you can recover when you sell, and appreciation adds to it, while the same dollars paid as rent are gone. A payment comparison also ignores the $80,000 of down payment and $12,000 of closing costs a buyer gives up, which a renter can keep invested. Net cost subtracts what each path is worth at the end, so it measures the price of the decision rather than the size of the check.
Three. Maintenance, which Freddie Mac recommends budgeting at 1 to 2 percent of home value each year and which no landlord absorbs for you. Property taxes and insurance, which rise with the assessed value of the home rather than staying fixed with the mortgage. And the cost of selling, which the National Association of Realtors puts at 8 to 10 percent of the sale price once commissions, transfer taxes, and seller concessions are counted.
Less than it used to, and only for households that itemize. The 2026 standard deduction is $16,100 single and $32,200 married filing jointly, so mortgage interest plus state and local taxes plus charitable gifts has to clear that bar before the deduction is worth anything. The higher $40,400 SALT cap that took effect under the One Big Beautiful Bill Act pulls some high-tax-state owners back into itemizing, but a household taking the standard deduction gets no federal tax benefit from buying at all. This calculator ignores the deduction, which makes it slightly pessimistic about buying.
No, and the arithmetic shows why. Through a mortgage, equity builds slowly at first because most of the early payment is interest. On the default loan here, $149,376 of interest is paid across the first seven years, and the balance is still $291,444 against a $400,000 purchase price. Meanwhile the $92,000 of upfront cash that a renter keeps would grow to roughly $129,000 at a 5% return. Equity is real, but it is not free.
It is the single most powerful input. The FHFA House Price Index has averaged about 4.3% a year since 1975, with the St. Louis Fed noting a 5.1% annual average since 1976 against 3.7% inflation. At 3.5% appreciation in this model, renting stays ahead through year 11. At 5%, buying wins from year 6. At zero appreciation, buying does not win inside 30 years. Nobody knows the future rate, which is exactly why the assumption deserves a stress test rather than a single guess.
All calculation logic on this page is implemented from the primary documents below. Each one is listed with the figure it supplies, so any rate or threshold in the result can be traced back to its published source.
Same published formulas, same sourcing standard, one page each.