How long do you need to stay for buying to make sense?

The break-even point varies based on home price, local rent levels, appreciation, and transaction costs. In most US markets, buying typically breaks even at 3-7 years. High-cost cities with expensive homes and modest rents may have break-even points of 10+ years.

What costs does this calculator include?

This calculator includes mortgage principal and interest, property taxes, and maintenance for buying. For renting, it includes monthly rent with annual increases. It does not include homeowners insurance, HOA fees, or the opportunity cost of the down payment investment — factors that would generally favour renting.

What home appreciation rate should I use?

The US national average home appreciation is approximately 3-4% per year over the long term. However, this varies significantly by location. High-demand urban areas have historically appreciated faster; rural areas slower. Use a conservative estimate (3%) for planning and model a pessimistic scenario (1%) to stress-test your decision.

Should I factor in the investment return on my down payment?

This is a valid consideration — the down payment and closing costs tied up in the home could alternatively be invested. If you could earn 7-8% annually in index funds instead, the opportunity cost is significant. However, leverage on the home also amplifies returns. This calculator uses home appreciation as the primary return driver.

Why does renting sometimes win even over long time horizons?

Renting can win over long horizons in markets where rent is cheap relative to purchase prices (high price-to-rent ratio), where home appreciation is slow, or where property taxes and maintenance are very high. The classic example is San Francisco — the price-to-rent ratio has historically been so high that renting and investing the difference often outperforms buying.

Rent vs Buy Calculator

The rent vs buy decision is one of the most consequential financial choices most people make — and one of the most misunderstood. The popular wisdom that 'renting is throwing money away' is simplistic at best and harmful at worst. The truth is more nuanced: sometimes buying is the clear winner, some...

RENT VS BUY

🏠 BUYING

Home Price

Down Payment (%) — optional

Mortgage Rate (%) — optional

Loan Term (years) — optional

years

Property Tax Rate (%/yr) — optional

%/yr

Annual Maintenance (%/yr) — optional

%/yr

🏢 RENTING

Monthly Rent

Annual Rent Increase (%/yr) — optional

%/yr

📊 ASSUMPTIONS

Annual Home Appreciation (%/yr)

%/yr

Time Horizon (years)

years

LIVE DIAGRAM

Enter home price and monthly rent to see comparison

Created with❤️byeaglecalculator.com

HOW TO USE

1
Enter the Home Price you are considering and the Monthly Rent you would pay for a comparable property.
2
Set your Time Horizon — how many years do you plan to stay? This is the most important variable.
3
Review the default assumptions (down payment, rate, appreciation, rent increase) and adjust if needed.
4
Check the verdict: does buying or renting win over your time horizon? Note the break-even year.
5
Try changing the Time Horizon to see how the verdict changes at 3, 5, 7, and 10 years.

WORKED EXAMPLE

A couple considers buying a $400,000 home vs renting a comparable apartment for $2,000/month. Buying: 20% down ($80,000), 7% mortgage for 30 years = $2,129/month mortgage + $400/month tax + $333/month maintenance = $2,862/month total. After 7 years: total paid = $320,433, but equity = $200,278, so net cost = $120,155. Renting: $2,000/month with 3% annual increase. After 7 years: total paid = $183,899. But home value grew to $491,950. Net advantage of buying = $183,899 - $120,155 = $63,744. Buying wins after year 1 and saves $63,744 over 7 years.

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Last updated: April 25, 2026 · Formula verified by EagleCalculator team · Eagle-eyed accuracy for every calculation.