Rent vs Buy Calculator
The most important financial decision most people make. Factors in opportunity cost, home appreciation, rent inflation, tax benefits, maintenance, and transaction costs to find your true break-even point.
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| Year | Buy: annual cost | Buy: cumulative net | Rent: annual cost | Rent: cumulative net | Better to… |
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Why renting isn’t always “throwing money away”
When you rent, your down payment stays invested and compounding. You avoid maintenance costs, property taxes, and transaction costs. In expensive markets, renting and investing the difference can outperform buying — especially if you move within 5 years.
The break-even point is the key number
The break-even point is how many years you need to stay before buying beats renting. In most US markets, the break-even is 3-7 years. If you’re likely to move before that, renting almost always wins.
The price-to-rent ratio
Divide the home price by annual rent. Under 15 = strong buy market. 15-20 = neutral. Over 20 = renting may make more financial sense. Coastal cities like San Francisco (30+) strongly favor renting, while Midwest cities like Indianapolis (~12) strongly favor buying.