Rent or buy? See who's ahead the day you sell.
A mortgage payment against a rent check is the wrong comparison. This gives a buyer and a renter the same cash and the same monthly budget, lets the renter invest what the buyer puts into the house, and shows which one has more when the buyer sells.
Rent vs. buy
No signup, nothing stored.
After 7 years, renting leaves you ahead by
$19,048
- Cost to own, first month
- $2,936
- Buying pulls ahead
- Year 11
- Rent that makes it a tie
- $2,576
Buyer's wealth minus renter's, if the buyer sold that year
Buy minus rent Even Your stay
After 7 years, side by side
An estimate on steady growth rates and a fixed-rate loan, before income taxes. It is not a loan offer or a forecast of prices. The reasoning and worked examples are in the guide: Rent or buy? The math that decides it.
Six things behind the answer
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A fair comparison spends the same money
Comparing a mortgage payment with a rent check flatters buying, because the payment is only part of what an owner spends, and the renter keeps the down payment. This calculator gives both households the same cash on day one and the same housing budget every month. The renter invests the down payment and closing costs; whichever household spends less on housing in a month invests the difference. When the buyer sells, we compare what each one has.
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Where the default rate and price come from
The mortgage rate starts at the latest weekly average from Freddie Mac's Primary Mortgage Market Survey, fetched from FRED when the page loads (30-year, or 15-year if you choose that term). The $400,000 price is near the median sales price of new houses sold, $393,300 in the third quarter of 2026 (Census and HUD via FRED). The $2,400 rent is an example, not an average. Use the rent for a home like the one you would buy, in the same area: that comparison is the whole point.
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Growth rates are guesses, so test them
The defaults use the latest year: U.S. house prices rose 2.1% from the second quarter of 2025 to the second quarter of 2026 (FHFA), and the consumer price index for rent of a primary residence rose 2.8% in the twelve months to September 2026 (BLS). One year says little about the next seven. The 5% return on invested savings sits near the 10-year Treasury yield; a stock fund may earn more over long periods, with more risk. Move each slider and see which one changes the answer. That is the assumption to think hardest about.
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The costs of owning that never come back
Property tax defaults to 0.89% of the home's value, the 2024 U.S. average from Census survey data (NAHB); your county's rate may be a third of that or double it. Insurance starts at $1,500 a year, near the $1,522 average Freddie Mac found for 2023 (Freddie Mac). Maintenance at 1% of value a year is a common rule of thumb, not a measured figure. Tax, insurance and upkeep rise with the home's value here. Below 20% down, PMI uses the same illustrative rates as our mortgage calculator and stops when the scheduled balance reaches 78% of the price, the point at which a servicer must end it automatically (CFPB).
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Buying and selling both cost money
Closing costs default to $6,700, close to the $6,684 median of lender and settlement charges on 2023 purchase loans (CFPB). The 6% selling cost is our assumption for agent commissions, transfer taxes and the other costs of a sale. Commissions are negotiable, and since August 17, 2024, offers to pay the buyer's agent can no longer be made on the multiple listing service (NAR). Ask agents for their rate and add your state's transfer tax.
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What this leaves out
Income taxes. The mortgage interest and property tax deductions help only if you itemize, and the 2026 standard deduction is $16,100 for a single filer and $32,200 for a married couple filing jointly (IRS). Gains on a main home are often tax-free up to $250,000, or $500,000 for a married couple filing jointly, if you owned and lived in it for two of the five years before the sale (IRS), while the renter's investment gains may be taxed; that leaves out a small edge for buying. Also left out: renters insurance, moving, furniture, and the value of stability or flexibility, which no calculator can price for you.
Questions people ask
Is it better to rent or buy a house right now?
It depends on the rent for a comparable home, how long you will stay, and the rate you can get. In our example, a $400,000 home with 20% down at 7.24% costs $2,936 a month to own in the first year, against $2,400 to rent a similar place. If the renter invests the difference, renting is about $19,000 ahead after seven years, and buying pulls ahead in year 11. At $2,800 rent, buying is ahead from year 5.
How long do you need to stay in a house for buying to beat renting?
Long enough for the home's growth and the loan paydown to cover what you spend to buy and sell. In our example that is 11 years at $2,400 rent, 5 years at $2,800, and about 7 years if the mortgage rate is one point lower. Selling costs of around 6% are the main reason short stays rarely favor buying.
What is the 5% rule for renting vs. buying?
It estimates the yearly unrecoverable cost of owning as 5% of the home's price (property tax, maintenance and the cost of capital) and compares it with a year's rent. It is a quick screen, not an answer. The calculator does the same thing month by month with your own rate, taxes and growth assumptions.
Does the mortgage interest deduction make buying cheaper?
Only if you itemize, and only by the amount your itemized deductions exceed the standard deduction, which for 2026 is $16,100 for a single filer and $32,200 for a married couple filing jointly. Many owners take the standard deduction, so this calculator leaves the deduction out.
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This calculator produces estimates from the inputs you provide and steady growth assumptions that real markets won't follow. It is not a loan offer, a rate quote or a forecast of home prices or rents. It is educational and is not personalized financial, tax or legal advice.