Should I Rent or Buy? | Honest Calculator With All Costs
Compare renting vs buying with ALL hidden costs included: opportunity cost, maintenance, transaction fees, and appreciation. See exactly when buying beats renting for your situation.
Should I Rent or Buy a House?
This isn't a simple "multiply rent by 200" calculator. We model rent inflation, home appreciation, opportunity cost on your down payment, maintenance, and transaction costs to show you the real crossover point.
Home Purchase
Renting
Expected return if you invest the difference
Assumptions
Annual maintenance as % of home value
Enter your information and click "Calculate Rent vs Buy" to see your results.
What This Calculator Answers
Most rent vs buy calculators oversimplify. They compare your rent to a mortgage payment and declare a winner. But that ignores opportunity cost—what your down payment could earn if invested—and the hidden costs of ownership that add 30-50% to your monthly housing expense.
This calculator models the full picture: rent inflation over time, home appreciation (or depreciation), maintenance costs, property taxes, insurance, transaction costs when you eventually sell, and what your down payment would grow to if invested instead. The result is a year-by-year net worth comparison showing exactly when—and if—buying pulls ahead.
When Buying Makes Sense
- ✓You'll stay 7+ years — Transaction costs (buying + selling) typically eat 8-10% of home value. You need time to recover that.
- ✓Price-to-rent ratio under 20 — If a $400k home rents for $2,000/month (ratio = 16.7), buying is likely favorable. Above 25, renting usually wins.
- ✓You want stability — Owning locks in your housing cost (mostly). Renters face unpredictable increases and potential displacement.
- ✓Local appreciation is strong — In markets with 4%+ annual appreciation, buying builds wealth faster than renting and investing.
When Renting Makes More Sense
- →You might move in under 5 years — Job changes, relationship changes, or life uncertainty make renting's flexibility valuable.
- →Price-to-rent ratio exceeds 25 — In expensive markets like SF or NYC, renting and investing the difference often wins mathematically.
- →You'd drain your emergency fund for a down payment — Buying with no cushion is risky. One major repair could force you to sell at a loss.
- →Your career is location-flexible — Remote workers who might relocate for opportunity shouldn't anchor themselves to a property.
Frequently Asked Questions
Is it better to rent or buy a house right now?
It depends on how long you'll stay, local price-to-rent ratios, and your opportunity cost. Generally, buying makes sense if you'll stay 5+ years and the monthly cost of owning (including all hidden costs) is within 1.5x your rent. Use this calculator to see your specific breakeven timeline.
How long do you need to own a home for buying to make sense?
Typically 5-7 years minimum. Transaction costs (closing costs when buying, 6% agent fees when selling) eat into any appreciation. The exact breakeven depends on your market's appreciation rate, your mortgage rate, and what rent would cost instead.
What hidden costs make buying more expensive than renting?
Property taxes (1-2% of home value annually), homeowners insurance, maintenance (budget 1% of home value per year), HOA fees, and opportunity cost on your down payment. These often add $500-1,500/month beyond your mortgage payment.
Should I buy a house if I might move in 3 years?
Probably not. With typical 3% closing costs and 6% selling costs, you need roughly 9% appreciation just to break even. In a flat or declining market, you could lose money. Renting provides flexibility without the transaction cost risk.
Related Decisions
How Much House Can I Afford?
Decided to buy? See what price range fits your income and debts.
Down Payment Strategy
Compare 3%, 5%, 10%, and 20% down to find your optimal amount.
True Monthly Cost Calculator
See your real monthly payment including taxes, insurance, and PMI.
Refinance Calculator
Already own? See if refinancing to a lower rate makes sense.