Is buying always better than renting long-term?

Not always. Buying requires a 5-7 year horizon to break even on transaction costs. If you move frequently, renting and investing the down payment can outperform buying in high-cost markets.

What is the price-to-rent ratio?

Divide home price by annual rent. A ratio below 15 favors buying; above 20 favors renting; 15-20 is a gray zone. Many major cities have ratios of 25-40+, strongly favoring renting.

What costs does the calculator include?

Buying: mortgage interest, property tax, insurance, PMI, maintenance (1-2%/year), closing costs, and selling transaction costs (5-6%). Renting: rent, renters insurance, and investment returns on down payment.

Rent vs Buy 10-Year Comparison

Compare the true financial outcome of renting vs buying over 10 years, including equity buildup, opportunity cost of down payment, taxes, and transaction costs.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Compare the true financial outcome of renting vs buying over 10 years, including equity buildup, opportunity cost of down payment, taxes, and transaction costs. Use the rent vs buy result to inform your calculation.

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Rent vs Buy 10-Year Comparison

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Frequently Asked Questions

Is buying always better than renting long-term?

What is the price-to-rent ratio?

What costs does the calculator include?