Is it cheaper to rent or to buy, and from which year?

Take the defaults above: a $400,000 house, $80,000 down, a 6.65% mortgage over 30 years, against $2,000 a month of rent for something comparable. Owning costs less than renting from year 13. Not from the day you get the keys, and not from the day the payment drops below the rent, which is a different date entirely: month one costs $2,817 to own, everything in, against $2,000 of rent, and owning does not cost less month to month until month 193, in year 17, 4 years after the break-even. Equity and the sale cross first; the monthly bill catches up later.

Year 13 is the first year a sale leaves you ahead. Sell then and the house puts $301,532 in your pocket after the 6% selling cost and the loan payoff, while the same money invested instead would be worth $298,206. One year earlier the order is reversed. That is the whole comparison, and everything else on this page is a way of checking it.

Before that year the gap is not small. At the end of year 1 owning has cost $55,047 against $19,177, because you paid $12,000 to buy and would pay 6% to sell twelve months later. At year 5 it is $127,532 against $95,996, and at year 10 $208,074 against $193,233. The monthly payment behind those figures is $2,054 of principal and interest, which is the same number the mortgage payment calculator returns for this loan, plus $763 a month of tax, insurance and upkeep on top of it.

The horizon is a window, not a forecast of how long you stay. It decides how far ahead the page looks, and nothing else. If the two lines never cross inside it, the page says so rather than quietly extending the window until they do.

Owning pays out $1,238,833 across 30 years: $80,000 down and $12,000 in closing costs on day one, then $419,544 of mortgage interest, $320,000 of principal, $168,988 of property tax, $48,000 of homeowners insurance and $190,302 of maintenance. At the end the house is worth $970,905, selling costs take $58,254, the loan is paid off, and $912,651 comes back. Net cost of owning: $326,182. The day-one cash, $92,000, is priced line by line at cash to close.

Renting pays $1,141,810 of rent over the same years, starting at $2,000 and rising 3% at each anniversary. Against that sits the account: $92,000 that never left, then $88,483 paid in across the 192 months owning cost more than the rent, less $83,460 taken back out across the 168 months it cost less. Those two nearly cancel, so the account is fed only $5,023 on net after day one: the upfront money is doing almost all of the work. It is worth $587,773 by year 30, of which $490,750 is return. Only that return is subtracted from the rent, because the contributions themselves are already charged to the owning side. Net cost of renting: $651,060.

Account both sides that way and the comparison collapses to one line. The difference between them, $324,877 in favor of owning by year 30, is exactly the sale proceeds of $912,651 less the account's $587,773. Everything else cancels, which is the test that the two ledgers are being kept honestly rather than one of them being padded.

The line most rent-versus-buy calculators omit is the one above: what the money a buyer spends would have earned if it had not been spent. Leave it out and the renter pays rent for thirty years and gets nothing back, which is not what happens. Put it in and it moves the answer more than the price does. Here is the same house, the same rent, the same everything, with only the assumed return changed:

Moving the assumed return from 3% to 5% moves the break-even from year 8 to year 13. At 7% it leaves the window entirely. Nothing about the house changed. If a calculator does not show you this row, it has made the choice for you and not told you which way. What that account actually does over the years is ordinary compounding, which the compound interest calculator shows on its own terms.

Two assumptions move it further than the rest: how fast the house gains value and how fast the rent rises. Every cell below is the first year owning has cost less than renting, on the same $400,000 house and $2,000 rent as above, with only those two changed. Rows are annual appreciation; columns are annual rent growth.

Read the corners. A house gaining 5% a year against rent rising 5% breaks even in year 4. A house gaining 0% against rent rising 1% never breaks even at all inside 30 years. The same buyer, the same lender, the same house. A single number for the break-even year is therefore not a fact you can look up; it is a statement about what you believe, and the honest version of this tool is one that shows you the whole grid rather than the cell that flatters the answer.

Notice also that rent growth and appreciation are not independent in the real world: both are driven by what happens to housing demand where you live. Setting appreciation high and rent growth near zero is arithmetically allowed here and rarely describes anywhere.

Tax. No line here is after-tax. Mortgage interest and property tax can be itemized deductions, which lowers the real cost of owning, but only for the share of filers whose itemized total beats the standard deduction, and the deduction for state and local tax is capped. On the other side, the return in the renter's account is taxable when it is realized, and a gain on a primary residence is largely excluded from tax under section 121. Those pull in opposite directions and neither is modeled. Work out your own bracket at the income tax calculator, and what the investment gain would cost at the capital gains calculator, before treating any figure on this page as final.

Whether you actually stay. The page prices a sale at every year end, but it has no view on how likely you are to move in year 4. Jobs, families and landlords all have opinions about that, and the early years are where being wrong is most expensive: selling in year 1 costs $35,870 more than renting on these numbers.

That a house is not liquid. The sale proceeds in every row assume a sale happens on schedule at the modeled price. In practice a house takes weeks or months to sell, may not fetch the modeled price, and cannot be sold in pieces when you need part of the money. The renter's account can be sold on any weekday. That difference has real value and no number in this model captures it.

Two inputs that are not statistics. Maintenance and the cost of selling have no primary national source this page is willing to cite, so both are your inputs with plainly labeled example defaults: 1% of the home's value a year in upkeep, and 6% of the sale price at exit. The upkeep default is a common rule of thumb rather than a measurement, and what you pay to sell turns on a commission you negotiate, which no national average can tell you in advance. Both defaults are there so the page runs, not because anyone measured them.

Costs held flat. Property tax and maintenance ride the home's value and rise with it. Homeowners insurance and HOA dues are held in today's dollars for the whole run, which understates owning: premiums have been rising faster than that. Property assessments are also modeled as tracking market value, which is not how caps and reassessment cycles work in several states.

Each point of assumed rent growth takes $322,044 off what owning costs against renting over 30 years, and it moves the break-even from year 13 to year 10. Each point of assumed appreciation takes $205,530 off what owning costs against renting over 30 years, and it moves the break-even from year 13 to year 7. Each point of assumed return on the money a renter keeps invested adds $204,841 to what owning costs against renting over 30 years, and it moves the break-even from year 13 to year 20.

The down payment moves it in a way worth naming separately, because it changes what the loan costs rather than only how much of it there is. Put $40,000 down on the same house instead of $80,000 and private mortgage insurance appears: $180 a month for 111 months, $19,980 in total, charged until the scheduled balance reaches 78% of the price. The break-even moves from year 13 to year 19. Under the Homeowners Protection Act the servicer must drop it automatically at 78%, and you may ask for cancellation at 80%, which comes sooner. Whether a lender approves the payment at all is a debt-to-income question, and house affordability runs the whole thing backwards from an income to a price.

What this page will not do is tell you which to pick. It computes both sides, names the year they cross, and shows what would move that year. On these defaults owning costs less from year 13 and by year 30 it is ahead by $324,877; change one assumption in the grid above and that sentence changes with it. Housing is also a decision about where you want to be, which no calculator has any standing to price.

This calculator is built to be used without a browser. Every input is a query parameter on this page, and the same parameters on the JSON twin return the complete answer as a document.

GET /tools/rent-vs-buy.json?price=650000&rent=2900&down=65000&years=10

The response carries inputs after parsing and clamping, result with breakEvenMonth and breakEvenYear, the first month and year a sale leaves the owner ahead, or null when that never happens inside the horizon; own, the owning ledger with every outlay separately, the home value, the loan balance, the selling cost, the net sale proceeds and the net cost; rent, the renting ledger with the rent paid, what went into the invested account, what it is worth, the return it earned and the net cost; gap and cheaper; crossesBack for the cases where owning pulls ahead and then falls behind again; monthOne, both sides broken out for the first month; yearly, a row per year with a sale priced at that year end; and sensitivity, a break-even grid across appreciation and rent growth, the same grid across the assumed return, and both net costs at four horizons, drivers ranked by effect with a plain sentence each, assumptions that say for every field whether you supplied it and name the source when the default came from one, sources with a URL and an as-of date for each source the tool cites, which is an empty list on the calculators whose every default is an example input rather than a published figure, warnings, a disclaimer, and in tool the canonicalUrl and jsonUrl that carry only your non-default parameters. The canonical URL is the answer's permanent address; use it when you cite the number.

Parameters, all optional, in any order:

• price ($), default $400,000.
• rent ($ per month), default $2,000 per month.
• down ($), default $80,000.
• years (years), default 30 years.
• rate (%), default 6.65%, from Freddie Mac Primary Mortgage Market Survey.
• term (years), default 30 years.
• taxRate (%), default 0.888%, from NAHB Eye On Housing, Property Taxes by State, 2024 (American Community Survey).
• insurance ($), default $1,600, from NAIC, Examining Homeowner Property Insurance Market Dynamics, 2018 to 2024.
• maintRate (%), default 1%.
• hoa ($ per month), default $0 per month.
• pmiRate (%), default 0.6%, from Freddie Mac, Breaking down PMI.
• closingRate (%), default 3%, from Freddie Mac, What are closing costs and how much will I pay?.
• sellRate (%), default 6%.
• appreciation (%), default 3%.
• rentGrowth (%), default 3%.
• investReturn (%), default 5%.

Values accept plain numbers and loose human formats such as 100k, $100,000, or 6.5%. Unknown parameters are ignored, values outside a field's range are clamped and reported in warnings, and the endpoint never fails on bad input. Responses are cacheable for a day; the defaults change when their sources publish, and tool.version changes when the method does.

• Freddie Mac Primary Mortgage Market Survey, as of 2026-08-20. 30-year fixed-rate mortgage average 6.65%; 15-year 5.95%.
• NAHB Eye On Housing, Property Taxes by State, 2024 (American Community Survey), as of 2025-11-26. National effective property tax rate $8.88 per $1,000 of home value (0.888%).
• NAIC, Examining Homeowner Property Insurance Market Dynamics, 2018 to 2024, as of 2026-07-31. 2024 average homeowners premium per policy: $1,600 countrywide.
• Freddie Mac, Breaking down PMI, as of 2026-08-21. Private mortgage insurance typically costs $30 to $70 per month for every $100,000 borrowed (0.36% to 0.84% of the loan per year). Required on conventional loans with less than 20% down.
• CFPB, When can I remove private mortgage insurance (PMI) from my loan?, as of 2023-08-28. Under the Homeowners Protection Act a servicer must automatically terminate PMI on the date the principal balance is scheduled to reach 78% of the home's original value; the borrower may request cancellation at 80%.
• Freddie Mac, What are closing costs and how much will I pay?, as of 2026-02-26. Closing costs typically run 2% to 5% of the home purchase price, paid in addition to the down payment.

The carrying costs carry citations. The forecasts do not, and cannot: home appreciation, rent growth and the return on invested money are assumptions you choose, so their fields say so instead of borrowing authority from a source that never claimed to predict them. Maintenance and the selling cost are in the same category and are labeled the same way. Everything with a citation above is a published figure with the date it was published, and every one of them is an input you can overwrite.

Carlo is a personal finance agent. It knows your accounts, debts, and goals, so instead of a national default for rent and a guess at your down payment it can use the rent you actually pay, the cash you actually have, and what your money is actually earning, and rerun this comparison whenever any of the three changes. Text it the question.

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