Should you rent or buy?

How this calculator works

Most rent-vs-buy tools ask the wrong question. They add up what you'd spend on a mortgage, call renting "throwing money away," and quietly ignore the cash a renter could invest instead. This one answers the question that actually matters: over the years you plan to stay, which choice leaves you with more money - and how long until buying comes out ahead?

It runs both lives side by side, month by month, on the same budget. Whoever has the cheaper month invests the difference. At the end it compares what each person is worth: the buyer's home equity plus any savings, against the renter's investments. Everything runs in your browser - no ads, no email, nothing leaves your device.

The thing most calculators get wrong

The biggest mistake in a rent-vs-buy comparison is forgetting what the renter does with the money they didn't sink into a home. We account for it:

• The renter starts by investing the down payment plus closing costs - the cash a buyer ties up in the purchase - and it grows at the return you set.
• Each month, we take the bigger of the two housing costs as the budget. Whoever spends less that month invests the rest. So if owning costs more one month, the renter banks the difference; if renting costs more, the buyer banks it.

This is what separates a fair answer from a sales pitch. Skip it and the math quietly tilts toward buying.

The buying side

Owning builds wealth through equity - your shrinking loan balance plus any rise in the home's value - but it costs real money along the way:

Cost	How we handle it
Mortgage payment	A standard fixed-rate mortgage (the same math as our mortgage calculator)
Property tax	Your annual amount, rising over time (see below)
Homeowners insurance	Your annual amount, rising with inflation
PMI	Mortgage insurance on loans with less than 20% down, dropped once you've paid the balance to 78% of the home's original value
Maintenance	A percent of the home's current value each year (about 1% is a common rule of thumb)
Closing costs	A one-time percent of the price, paid when you buy
Selling costs	Agent commissions and closing, a percent of the price, paid when you sell

When your stay ends, we work out what you'd pocket if you sold: the home's value, minus selling costs, minus whatever you still owe, minus any tax on the profit. The good news on that last part: when you sell your main home, the first $250,000 of profit is tax-free ($500,000 if you're married), so most sellers owe nothing. Your net worth as a buyer is that take-home equity plus any investments you built up.

The renting side

The renter pays rent (rising each year at the rate you set) plus a small renters insurance premium - and invests the down payment, the closing costs, and the difference in any month renting is cheaper. Their net worth is simply that investment pot, after one round of tax when they cash out.

The breakeven year

Because buying hits you with big upfront costs, renting almost always wins early and buying wins later - if you stay long enough. The breakeven year is the first year buying pulls ahead and stays ahead. We don't count a brief head-fake: buying has to hold the lead through the rest of your stay to count.

How we handle taxes on investments

The return you enter is a before-tax number. We let both sides' investments grow at that rate, then take the tax out once - at the rate you set - when the money is cashed out at the end. We deliberately don't shrink the return for taxes and tax it again at the end; that common double-count quietly understates the renter's wealth and tilts the answer toward buying.

What about the mortgage tax break?

You've probably heard you can "write off your mortgage interest." True, but only if your write-offs add up to more than the standard deduction - the flat amount everyone gets to subtract at tax time. Each year we add your mortgage interest to your property tax, compare the total to the standard deduction, and count only the part that's bigger, times your tax rate.

Here's the catch most people miss: since 2018 the standard deduction is big enough ($16,100 if you're single, $32,200 if married, and rising every year) that a typical mortgage clears little or nothing extra. So if this number shows $0, that is usually correct, not a bug. Two notes for the curious:

• There's a federal limit on how much of your state and local taxes - property tax included - you can write off (the "SALT cap"). We hold it at $40,000 and keep it simple: the 2026 limit is about $40,400 and is set to drop back to $10,000 in 2030, but we don't model those wrinkles. Erring this way is conservative - it slightly understates the buyer's tax break.
• The standard deduction grows with inflation each year, so the bar your mortgage has to clear keeps rising.

What changes over time

Nothing here is frozen for decades, because real life isn't:

• Home value grows at your appreciation rate; rent grows at your rent-growth rate; maintenance rises along with the home's value.
• Property tax, insurance, and HOA dues rise with inflation.
• The standard deduction rises with inflation too.

What to double-check

We built this accuracy-first: the engine is independently tested, and the mortgage math matches our mortgage calculator to the penny. The defaults are long-run averages - roughly 3.5% home appreciation, 3% rent growth, a 7% investment return, and 3% inflation - as of June 2026, and every one is editable.

The four numbers that move the answer most are home appreciation, investment return, rent growth, and how long you stay. Nudge each one up and down and watch the breakeven year move - that tells you whether the answer is rock-solid or rests on an optimistic guess.

This is an educational tool to help you think it through, not financial advice or a loan offer. Your real numbers depend on your full financial picture, your local market, and a lender. Want to share a scenario? Every input is saved in the page's web address, so you can copy the link and send your exact setup - answer and all - to a partner, agent, or loan officer. No account needed.