Buy vs Rent Calculator

It depends primarily on how long you plan to stay. Buying typically beats renting after 5-7 years in most US markets when you account for equity building, home appreciation at approximately 3-4% annually, and the fact that rent increases over time while a fixed-rate mortgage payment stays constant. If you plan to stay fewer than 5 years renting is usually cheaper when you factor in closing costs, down payment opportunity cost, maintenance, and property taxes.

The breakeven point is the number of years you need to stay in a home for buying to be cheaper than renting over the same period. It accounts for your down payment, mortgage payments, property taxes, insurance, maintenance, home appreciation, and equity building. In most US cities the breakeven is 5-7 years. In high-cost cities like San Francisco or New York it can be 10+ years.

This calculator includes monthly mortgage payment based on a 30-year fixed rate, property tax at 1.2% of home value annually, homeowner's insurance at 0.5% annually, maintenance at 1% annually, and the opportunity cost of your down payment invested at 7% annual return. It also accounts for home appreciation at 3% per year and the equity you build through mortgage payments.

Whether to buy in 2026 depends on your personal situation — your income stability, credit score, down payment savings, how long you plan to stay, and local market conditions. Mortgage rates in 2026 are approximately 6.5-7.5% for a 30-year fixed loan. Use this calculator with your specific numbers to find your personal breakeven point rather than relying on general market advice.

A 20% down payment avoids private mortgage insurance (PMI) which typically costs 0.5-1.5% of the loan amount annually. However putting down less allows you to buy sooner and keep more cash invested. FHA loans allow as little as 3.5% down. The right down payment depends on your PMI cost, how long you plan to stay, and your investment return expectations for the alternative use of that capital.

Opportunity cost is what your down payment could earn if invested instead of used to buy a home. A $90,000 down payment on a $450,000 home invested at 7% annual return would grow to approximately $176,000 in 10 years. This is a real cost of homeownership that most buy vs rent calculators ignore — this calculator includes it.