Rent vs Buy Calculator

Compare buying a home — mortgage P&I, property tax, insurance, HOA, maintenance, appreciation, sale costs — against renting and investing the same upfront cash plus any annual cash-flow gap. The chart marks the break-even year where buying overtakes renting on net wealth.

Last reviewed Apr 29, 2026 · Editorial

Per-market presets · Year-by-year schedule · No tax effects modelled

For information only — not investment, financial, or tax advice. This calculator estimates results based on the inputs you provide. It does not constitute professional advice and infoz.com is not a CPA, EA, attorney, or registered investment adviser. Tax laws change. Individual circumstances vary. Consult a qualified professional licensed in your jurisdiction before making any financial decision.

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Market preset:Editing all inputs is allowed; presets just seed defaults.

After 10 years

Renting wins

Renter comes out $43,239 ahead of the buyer.

Buyer's net equity

$323,877

Home value − mortgage − sale costs

Renter's portfolio

$367,116

Down payment + savings, invested

Loan amount: $400,000
Monthly P&I: $2,528
Initial outlay: $115,000
Break-even year: Beyond horizon
Year-1 buyer cost: $42,339
Year-1 rent cost: $30,240

Wealth trajectories

How the two paths grow side by side. The vertical dashed line, if present, marks the year buying first overtakes renting.

Tip: shorten the horizon and notice how renting almost always wins in the first 5 years — the upfront closing + selling cost drag is big relative to early home appreciation.

Year-by-year breakdown (10 years)

Yr	Buy cost	Rent cost	Home value	Loan bal	Buyer equity	Renter port.
1	$42,339	$30,240	$517,500	$395,529	$90,921	$135,573
2	$42,707	$31,140	$535,613	$390,759	$112,717	$157,034
3	$43,087	$32,067	$554,359	$385,669	$135,428	$179,433
4	$43,481	$33,022	$573,762	$380,238	$159,098	$202,818
5	$43,888	$34,005	$593,843	$374,444	$183,769	$227,244
6	$44,310	$35,018	$614,628	$368,261	$209,489	$252,768
7	$44,746	$36,062	$636,140	$361,665	$236,306	$279,451
8	$45,198	$37,136	$658,405	$354,627	$264,274	$307,357
9	$45,666	$38,243	$681,449	$347,117	$293,445	$336,554
10	$46,150	$39,383	$705,299	$339,105	$323,877	$367,116

Cash-flow gap reinvested at 7% when buying is more expensive than renting in a given year. Tax effects (mortgage interest deduction, primary-residence capital-gains exclusion) are intentionally not modeled — they tend to favour the buyer in high-rate jurisdictions.

How this calculator works

The calculator runs two parallel year-by-year ledgers. Both households start with the same upfront cash. The buyer commits it as down payment + closing; the renter invests it. From there each pays housing costs out of income, but the renter additionally invests any year in which buying would cost more than renting.

Initial outlay
Buyer: down payment + closing costs. Renter: same total cash invested at the assumed return. This 'fair-cash-position' setup is the standard convention since the 2014 NYT model.
Buyer side, each year
Run 12 months of standard amortization on the mortgage at the entered rate. Add property tax (% of current home value), home insurance (flat), HOA × 12, and maintenance (% of current home value). Step home value forward by the appreciation rate.
Buyer net equity
End-of-year home value − remaining mortgage balance − selling-cost percentage on the home value. This is the cash the buyer would walk away with if they sold.
Renter side, each year
Annual rent + renters' insurance × 12 = renter's housing cost. If buying costs more this year, the difference is invested mid-year (half-year compounding); the existing portfolio compounds for the full year. Step rent forward by the rent growth rate.
Recommendation + break-even
Break-even = first year buyer's net equity ≥ renter's portfolio (or null if it never crosses inside the horizon). Recommendation at horizon: 'buy' if buyer is >1% ahead, 'rent' if renter is >1% ahead, otherwise 'tie'.

Buyer net wealth (year t) = home_value(t) − mortgage_balance(t) − sale_costs(t) Renter net wealth (year t) = (initial_outlay + Σ cash-flow advantages) × compound at investmentReturn Break-even year = first t where buyer_wealth(t) ≥ renter_wealth(t)

Worked example: $500K home, 20% down, 6.5% / 30y vs $2,500/mo rent (US preset, 10y)

Inputs: home $500,000; 20% down ($100,000); closing 3% ($15,000); mortgage rate 6.5%, 30 years; property tax 1.1%; home insurance $1,500/yr; maintenance 1%; appreciation 3.5%; selling costs 6%; rent $2,500/mo growing 3%; renters' insurance $20/mo; investment return 7%; horizon 10 years. Buyer side at year 10: Loan amount = $400,000 Monthly P&I ≈ $2,528 Home value = $500,000 × 1.035^10 ≈ $705,000 Remaining principal after 120 months ≈ $338,000 Sale costs at exit = 6% × $705,000 ≈ $42,300 Net equity ≈ $705,000 − $338,000 − $42,300 ≈ $324,700 Renter side at year 10: Initial outlay invested = $115,000 × 1.07^10 ≈ $226,000 Plus cash-flow advantage in any year buying > renting (here typical for first ~3 years), each invested at 7% Total portfolio ≈ $250–270,000 depending on year-by-year gap Verdict: Buyer ahead at year 10 → break-even somewhere around year 7–9. Lengthening the horizon to 20+ years makes the buyer's lead grow rapidly because principal paydown accelerates and the mortgage payment is fixed while rent keeps stepping. Sensitivity: drop appreciation to 1.5% (pessimistic), and the break-even moves out beyond the horizon — renting wins. This is the single biggest swing factor.

Sources & methodology

Every numeric input to this calculator traces back to one of the following authoritative documents.

The New York Times — Is It Better to Rent or Buy? (interactive)primary · accessed 2026-04-29 · The seminal interactive that popularised the wealth-comparison framing this model is patterned on.
Federal Reserve Economic Data — Case-Shiller Home Price Indexprimary · accessed 2026-04-29 · Source for the US default home appreciation rate (~3–4% nominal long run).
Federal Reserve Economic Data — Rent of Primary Residence (CPI)primary · accessed 2026-04-29 · Source for default rent growth (~3% nominal).
ONS — UK House Price Indexsecondary · accessed 2026-04-29 · UK default home appreciation reference.
ABS — Residential Property Price Indexes (Australia)secondary · accessed 2026-04-29 · AU default home appreciation reference.
S&P Dow Jones Indices — S&P 500 Total Return Index historical performancecross-reference · accessed 2026-04-29 · Reference for the default 7% long-run real-equivalent return assumption used as the renter's alternative.

Frequently asked questions

What does 'wealth' mean in this comparison?: For the buyer: home market value − remaining mortgage balance − the selling-cost percentage (agent fees + transfer taxes). For the renter: the initial down payment + closing money invested in a portfolio at the assumed return, plus any annual cash-flow advantage when buying is more expensive than renting. We compare these two end-of-year totals year by year.
Why does renting almost always win in the first 5 years?: Two reasons. First, closing costs (typically 3–5% of price in the US, similar elsewhere) are sunk on day one. Second, selling costs (3–6% of price) are imposed on the buyer's notional exit at every snapshot — early on those eat almost all of the small initial appreciation. The buyer needs enough years for compounded appreciation + principal paydown to overtake those frictions.
Why isn't mortgage interest deductibility included?: Tax effects are jurisdiction-specific and depend on income, filing status, and itemizing. The US mortgage-interest deduction was significantly limited by the 2017 TCJA. The UK, Australia, and Canada generally do not allow it on a primary residence. Adding the deduction would systematically favour buying — we leave it out so the comparison is the worst case for buying.
Why is the renter's portfolio not reduced when rent exceeds buying cost?: Both paths assume the household pays housing out of income. The renter's portfolio reflects only the initial outlay invested + any cash-flow advantage in years when buying costs more. In years when renting costs more, the renter has no cash-flow advantage to invest but doesn't liquidate the portfolio either — they just pay the higher rent from income, exactly as a buyer pays the higher mortgage from income.
What do the per-market presets actually change?: They seed reasonable defaults for that country's market: typical home prices, mortgage rates, terms (US/AU = 30 years; UK/CA = 25 years), property tax rates, closing costs, and selling costs. The currency display also updates. You can override any input afterwards.
Should I trust the break-even year?: Use it as a planning compass, not a precision instrument. The single biggest input is your assumed home appreciation rate vs investment return — and both have wide historical bands. Stress-test your scenario by sweeping appreciation 2–4% and return 5–8%. If the recommendation is the same across the band, it's a robust call. If it flips, the choice is closer than headline numbers suggest.
Is this financial advice?: No. This is an informational tool that helps you compare two scenarios under your assumptions. infoz.com is not a licensed financial adviser. For personal decisions, consult a fee-only adviser, a tax professional for jurisdictional treatment, and a mortgage broker for actual rate quotes.

Important disclaimers

Calculation logic is based on data verified for general framework — not jurisdictional tax advice.

No professional advice. This calculator is provided for informational and educational purposes only and does not constitute investment, financial, or tax advice. infoz.com is operated by Web Publishing Corp, which is not a certified public accountant, enrolled agent, attorney, registered investment adviser, or licensed financial professional in any jurisdiction. Use of this calculator does not create any professional, fiduciary, or advisory relationship.

No warranties. Results are best-effort estimates based on the inputs you provide and the data sources cited. Tax law and financial regulations change without notice; data may be revised, withdrawn, or superseded between releases. We make no warranty, express or implied, that the result is accurate, current, complete, or suitable for your situation.

No liability. To the maximum extent permitted by law, infoz.com, Web Publishing Corp, and the authors disclaim liability for any direct, indirect, consequential, or incidental loss arising from use of this calculator or reliance on its output. You assume all risk of your reliance on the result.

Assumptions baked in:

Fixed-rate, fully amortizing mortgage. ARMs, balloon, and interest-only loans are not modeled.
Constant rates: mortgage rate, appreciation, rent growth, and investment return are all assumed flat across the horizon.
Both paths pay housing from income; the renter only invests the cash-flow advantage when buying is the more expensive option.
Maintenance and property tax scale with the home's annual value; HOA is flat; home insurance is flat.
Selling costs apply to every year's net-equity snapshot — i.e. we assume the buyer's wealth is what they'd net if they sold that year.

What this calculator does NOT cover:

Mortgage interest deduction, primary-residence capital-gains exclusion, or any other tax effects.
PMI / mortgage insurance premiums for low-down-payment loans.
Refinancing, prepayment, or extra principal payments.
Stamp duty / land transfer tax beyond the closing-cost % you enter.
Renter-side first-month + last-month + security deposit cash drag.
Sequence-of-returns risk and volatility (results are deterministic, not Monte Carlo).
Currency mismatch if you're paying mortgage in one currency and earning in another.
Insurance, HOA, or rent caps in regulated jurisdictions.

Talk to a professional. For decisions that involve real money — filing a return, structuring compensation, choosing an investment strategy — consult a qualified, licensed professional who can review your full circumstances. The cost of one consultation is almost always less than the cost of a wrong decision.

See the full site-wide legal disclaimer and terms for additional notices, including AI-assisted content disclosures and third-party data attribution.

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Editorial review

Last reviewed

April 29, 2026

Reviewed by

infoz Editorial Team — Editor, Web Publishing Corp

Rent-vs-buy framework patterned on the 2014 NYT interactive. Per-market presets cross-checked against each country's central-bank mortgage statistics + national house-price index.

Numbers, schedules, and source citations on this page are checked against primary sources during each review cycle. Spot something outdated or wrong? Report an inaccuracy — we triage every report within 7 days.

Rent vs Buy Calculator

Last reviewed Apr 29, 2026 · Editorial

Per-market presets · Year-by-year schedule · No tax effects modelled

Buy cost

Rent cost

Home value

Loan bal

Buyer equity

Renter port.

$42,339

$30,240

$517,500

$395,529

$90,921

$135,573

$42,707

$31,140

$535,613

$390,759

$112,717

$157,034

$43,087

$32,067

$554,359

$385,669

$135,428

$179,433

$43,481

$33,022

$573,762

$380,238

$159,098

$202,818

$43,888

$34,005

$593,843

$374,444

$183,769

$227,244

$44,310

$35,018

$614,628

$368,261

$209,489

$252,768

$44,746

$36,062

$636,140

$361,665

$236,306

$279,451

$45,198

$37,136

$658,405

$354,627

$264,274

$307,357

$45,666

$38,243

$681,449

$347,117

$293,445

$336,554

$46,150

$39,383

$705,299

$339,105

$323,877

$367,116

How this calculator works

Frequently asked questions

What does 'wealth' mean in this comparison?

For the buyer: home market value − remaining mortgage balance − the selling-cost percentage (agent fees + transfer taxes). For the renter: the initial down payment + closing money invested in a portfolio at the assumed return, plus any annual cash-flow advantage when buying is more expensive than renting. We compare these two end-of-year totals year by year.

Why does renting almost always win in the first 5 years?

Two reasons. First, closing costs (typically 3–5% of price in the US, similar elsewhere) are sunk on day one. Second, selling costs (3–6% of price) are imposed on the buyer's notional exit at every snapshot — early on those eat almost all of the small initial appreciation. The buyer needs enough years for compounded appreciation + principal paydown to overtake those frictions.

Why isn't mortgage interest deductibility included?

Tax effects are jurisdiction-specific and depend on income, filing status, and itemizing. The US mortgage-interest deduction was significantly limited by the 2017 TCJA. The UK, Australia, and Canada generally do not allow it on a primary residence. Adding the deduction would systematically favour buying — we leave it out so the comparison is the worst case for buying.

Why is the renter's portfolio not reduced when rent exceeds buying cost?

Both paths assume the household pays housing out of income. The renter's portfolio reflects only the initial outlay invested + any cash-flow advantage in years when buying costs more. In years when renting costs more, the renter has no cash-flow advantage to invest but doesn't liquidate the portfolio either — they just pay the higher rent from income, exactly as a buyer pays the higher mortgage from income.

What do the per-market presets actually change?

They seed reasonable defaults for that country's market: typical home prices, mortgage rates, terms (US/AU = 30 years; UK/CA = 25 years), property tax rates, closing costs, and selling costs. The currency display also updates. You can override any input afterwards.

Should I trust the break-even year?

Use it as a planning compass, not a precision instrument. The single biggest input is your assumed home appreciation rate vs investment return — and both have wide historical bands. Stress-test your scenario by sweeping appreciation 2–4% and return 5–8%. If the recommendation is the same across the band, it's a robust call. If it flips, the choice is closer than headline numbers suggest.

Is this financial advice?

No. This is an informational tool that helps you compare two scenarios under your assumptions. infoz.com is not a licensed financial adviser. For personal decisions, consult a fee-only adviser, a tax professional for jurisdictional treatment, and a mortgage broker for actual rate quotes.

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