Calculator
Rent vs Buy Break-Even
Two households on the same budget, month by month: whichever spends less that month invests the difference, and the renter starts by investing the whole deposit. Both are valued after tax, including the part of the mortgage interest deduction that is actually worth something — which for most buyers, once the standard deduction is accounted for, is nothing at all. It gives you a break-even and the whole path, not a verdict.
Uses published 2026 federal figures
How long you have to stay
Enter the price of the home and what you'd pay in rent instead, then press Calculate.
The home you'd buy
Costs of buying are loan fees, title, appraisal and inspection — usually 2–3% of the price. Costs of selling are the commission and transfer taxes, usually around 6%.
Both matter far more than people expect, because together they are roughly 8% of the price and they are paid on the way in and the way out. That is why a short stay almost never favors buying, however good the deal looks.
Under 20% adds mortgage insurance
Per year
Of the price
Of the sale price
What owning costs each year
Maintenance at 1% of the home's value a year is the standard rule of thumb. It is lumpy in reality — nothing for four years, then a roof — and smoothed here.
Mortgage insurance only applies below a 20% deposit, and stops once the balance reaches 80% of what you paid. It insures the lender, not you.
Property tax and maintenance are charged on the home's current value, so both grow as it appreciates. Insurance and HOA dues grow with inflation instead.
Of value, per year
Of value, per year
Per year
Per month
Annual, on the balance. Only applies below a 20% deposit.
The place you'd rent instead
Compare like with like. The rent for a place you would genuinely be happy in for the whole period, not the cheapest thing available — otherwise the comparison is between buying a house and living somewhere worse.
Rent growth is the single biggest lever on the renter's side. Long-run US rent growth has run close to inflation; a market where it runs well above that changes the answer quickly.
Per year
Per month
Years
Money and tax assumptions
The investment return is what the renter earns on the deposit they didn't spend — and what either household earns on whatever they save each month. It is the renter's whole case, so it matters as much as appreciation does.
Your marginal rate decides what the mortgage interest deduction is worth. For most buyers the honest answer is nothing at all, because their itemized total never beats the standard deduction — the tool works that out rather than assuming.
Other itemized deductions are charity, state income tax and the like. They matter here because they sit on top of your property tax and mortgage interest, and can be what pushes the total over the line.
Per year, before tax
On gains at the end
Per year
For educational purposes only. Results are estimates and do not constitute financial, tax, or legal advice. Consult a qualified professional before making any financial decisions.
How to use it
Compare like with like. The rent should be for somewhere you'd genuinely be happy living for the whole period — not the cheapest thing available. Otherwise you are comparing buying a house against living somewhere worse, which is a different question with an easier answer.
Then set the horizon to how long you actually expect to stay. This is the input that decides the answer more than any other, and it is the one you know best.
Three of the inputs are forecasts: appreciation, rent growth, and the investment return. Try the comparison two or three times with different values for them. If the break-even barely moves, you have your answer; if it swings by five years, the honest conclusion is that the numbers don't decide it and something else should.
Press Example to load a worked case: a $450,000 home against $2,400 a month in rent.
The deduction is probably worth nothing
“You get to write off the interest” is the most repeated and least true argument for buying. The mortgage interest deduction is an itemized deduction, and you only benefit to the extent your itemized total beats the standard deduction you would have got for free.
A single filer in 2026 starts from a standard deduction of over $16,000. A $300,000 mortgage at 6.5% produces about $19,000 of interest in year one, and falling every year after. Add capped property tax, subtract the standard deduction, multiply by a 24% rate, and the benefit is a few hundred dollars — heading to zero within a few years.
This tool computes it year by year and tells you plainly when the answer is zero. Most rent-vs-buy calculators apply your marginal rate to the whole interest figure, which overstates the benefit by an order of magnitude and tilts the entire comparison.
Why it refuses to tell you what to do
The report this tool was built from records people saying of existing calculators that they “find the results a bit difficult to believe” and that one “over estimated the differences significantly”. That distrust is well earned: a tool that turns three guesses into a one-word verdict has laundered a forecast into an instruction.
So the output here is a break-even — how many years you need to stay — and the whole path that produces it. A break-even is a fact about the assumptions you just entered. Whether you will still be there in seven years is a fact about your life, and you are much better placed to judge it than a calculator is.
None of this prices the things that actually decide it for most people: whether you can paint the walls, whether the landlord might not renew, or what it does to your commute.
Assumptions and limits
- Both households run on the same budget: whichever spends less in a month invests the difference. The renter starts by investing the deposit and the costs of buying, which is the largest single term on their side.
- Both sides are valued after tax. Gains in either side fund are taxed at the rate you supply, and the home's own gain is taxed above the §121 exclusion — 2026 figures, which change.
- Property tax and maintenance are charged on the home's current value, so they grow with appreciation. Maintenance is smoothed at a steady percentage, which understates the risk of a year with a new roof in it.
- Not modeled: rent control, a landlord who declines to renew, special assessments, the standard deduction changing over the horizon, or a housing market that falls.
- An estimate for planning. Not financial advice, and silent on every non-financial reason to own or rent a home.