Rent vs Buy Calculator
Year-by-year comparison with the actual break-even, including renter's invested capital.
Inputs
Renting
Buying
Comparison
Results
Net Worth Year-by-Year
Year-by-Year
| Year | Owner Equity | Renter Portfolio |
|---|---|---|
| 1 | $107,157 | $122,146 |
| 2 | $124,983 | $141,233 |
| 3 | $143,510 | $160,767 |
| 4 | $162,771 | $180,751 |
| 5 | $182,800 | $201,190 |
| 6 | $203,634 | $222,087 |
| 7 | $225,313 | $243,446 |
Sam's Take
The honest answer is 'it depends on how long you stay.' Most rent-vs-buy calculators ignore that the renter could invest the down payment elsewhere; this one accounts for that. Below 5 years, renting almost always wins because closing costs and selling fees dominate. Above 7-10 years, buying typically wins. The wildcards: appreciation rate (totally market-dependent) and your lifestyle (a paid-off house at retirement is different from cash in a 401k).
Related Calculators
The honest version of "should I rent or buy?"
Most rent-vs-buy calculators are quietly rigged toward buying. They show you the equity the buyer builds up, but they don't credit the renter for what they could have done with that down payment if they'd invested it instead. That's not an apples-to-apples comparison.
This one is honest. Both sides start with the same money. The renter takes what the buyer would have put down (plus closing costs) and invests it at a return rate you set. Every year, if owning costs more out-of-pocket than renting, the renter invests that difference too. Every year, the buyer is building equity through paydown and appreciation. The calculator runs both side by side and tells you in which year buying actually beats renting.
The break-even is usually somewhere between 5 and 10 years
For typical 2026 numbers — 7% mortgage rate, 3% appreciation, 7% S&P return — buying breaks even with renting somewhere between year 5 and year 10.
Under 5 years, renting almost always wins. The reason is transaction costs: you pay roughly 3% of the purchase price in closing costs going in (lender fees, title, inspection, transfer taxes), and 6% in agent commissions and seller concessions going out. That 9% round-trip eats the early years of equity build.
Past 10 years, buying usually wins. Leverage compounds (you got 4x exposure to appreciation with 25% down), the principal paydown accelerates, and the tax benefits add up. The crossover happens somewhere in years 5-10 depending on your specific numbers.
What "buying wins" doesn't capture
Even when the spreadsheet says rent, there are real reasons to buy that the math can't see:
- Tax benefits. Mortgage interest deduction, property tax deduction (capped at $10K SALT). Varies a lot by income and state.
- Stability. You can't be evicted from yourself. Your landlord can't sell out from under you. Your rent doesn't go up 8% next year.
- Lifestyle. Yard. Pets. Painting the walls. Renovating the kitchen. Knowing your neighbors for 15 years.
- Forced savings. Most people don't actually invest the difference. The mortgage is forced savings — you build wealth almost by accident, even if the spreadsheet says you'd have done better in stocks.
And what "renting wins" doesn't capture: flexibility. If your career might move you in 3 years, if you don't know what kind of place you want long-term, if you'd rather have $80K invested than $80K locked up in a foundation — those are real, and the calculator can't see them either.