Is buying really better than renting?
The real cost comparison realtors won't show you. Compare true total costs of renting vs buying over any time horizon.
Have feedback? We'd love to hear from youBuy Scenario
National avg ~6.5%
Rent Scenario
Avg ~3%/year
10 years
Buying wins after year 4. Over 10 years, buying leaves you $41,656 ahead.
Buy - net worth
$226,714
after 10 years (net of selling costs)Rent + Invest - net worth
$185,058
after 10 yearsMonthly mortgage
$1,770
Total buy cost (yr 1)
$2,175/mo
Net Worth Over Time
Buying overtakes renting at year 4.
Monthly Cost Over Time
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<p style="font-size:12px;text-align:center;margin-top:8px"><a href="https://whatbankshide.com/tools/rent-vs-buy/" target="_blank" rel="noopener">Powered by What Banks Hide</a></p>How It Works
We model two parallel scenarios year-by-year: buying (build equity through mortgage payments and appreciation, but pay taxes, maintenance, and interest) vs renting + investing (invest the down payment and any monthly savings in the market).
The buy scenario accounts for equity buildup, home appreciation, property taxes, insurance, maintenance, HOA, mortgage interest tax deduction, and 6% selling costs. The rent scenario accounts for rent increases and compound investment growth on the difference.
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Frequently Asked Questions
Why does renting sometimes win?
When you rent, you avoid property taxes, maintenance, insurance, and mortgage interest. If you invest the down payment and monthly savings, that portfolio can sometimes outpace home equity growth - especially in the first few years before equity builds up, and in expensive markets where the price-to-rent ratio is high. Read our full analysis at /guides/should-i-rent-or-buy.
What's included in buying costs?
Our calculation includes the full picture: mortgage P&I, property taxes, home insurance, HOA fees, maintenance costs, and 6% selling costs when you eventually sell. We also account for the mortgage interest tax deduction.
What about the emotional value of homeownership?
This calculator focuses purely on the financial math. The stability, pride, and freedom of owning your home have real value - but they're personal and not something a calculator can quantify. Use the numbers to inform your decision, not make it for you.
How accurate is the home appreciation estimate?
We default to 3.5% annual appreciation, which tracks the U.S. national average over the past several decades. Local markets vary significantly - some metro areas have seen 5-8% annual gains over the past decade, while others have stayed flat or declined. Adjust this based on your area using Zillow, Redfin, or local real estate board data to estimate your market's trajectory. Keep in mind that past appreciation does not guarantee future results, so a moderate estimate is usually the safest planning assumption.
Does this account for selling costs?
Yes. We subtract 6% selling costs (agent commissions and fees) from the home value when calculating buy net worth. This is why buying often looks worse for short stays - you need appreciation to overcome the transaction costs.
How many years before buying is cheaper than renting?
Typically 5-7 years, though it varies dramatically by market. High-cost cities like San Francisco or New York may require 10+ years. The break-even depends on home prices, rent growth, mortgage rates, and investment returns. This calculator models all of these.
What is the 5% rule for rent vs buy?
The 5% rule estimates that the annual unrecoverable cost of owning a home is about 5% of its value (property taxes ~1%, maintenance ~1%, cost of capital ~3%). If annual rent is less than 5% of the home's price, renting may be the better financial choice.
Is renting really throwing money away?
No - this is one of the most persistent myths in personal finance. Renters avoid property taxes, maintenance, insurance, and mortgage interest. If you invest the difference between renting and owning costs, you may come out ahead. The math depends on your specific market and timeline.