How this calculator works
The buyer pays a 30-year mortgage plus property tax, insurance and upkeep (entered as a yearly share of the home’s value), and pays about 3% in buying costs and 6% to sell.
The renter pays rent rising each year, and invests the down payment and buying costs instead.
Each month, whoever has the lower housing cost invests the difference at your expected return.
At the end, the buyer’s net worth is the home’s value minus selling costs and the remaining loan, plus their investments; the renter’s is their investments.
Worked example
$2,200 rent versus a $400,000 home, staying 7 years
- Home growth 3%, investment return 5%, rent growth 3%, 2.5% yearly ownership costs.
- Under these assumptions renting comes out about $11,000 ahead after 7 years.
- Staying longer or faster home price growth tips the result toward buying.
Questions people ask
How long do I need to stay to make buying worth it?
Often five to seven years or more, because buying and selling costs take time to recover. Try different numbers of years in the calculator to find the point where buying pulls ahead for your numbers.
Is rent money wasted?
Not entirely: renters avoid interest, property tax, maintenance and transaction costs, which are also money that doesn’t build equity.
Which assumption matters most?
Home price growth and investment returns. Try a few values to see how sensitive the answer is.
Last reviewed October 2, 2026