Rent vs. Buy Calculator
How many years before buying this property beats renting an equivalent? The single most important question for first-time buyers — and the one most calculators get wrong.
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The horizon question, not the gut question.
The right way to think about rent vs. buy is break-even horizon: how many years do you need to stay in this home before buying costs less in total than renting an equivalent place? The famous New York Times rent-vs-buy calculator popularized this framing in 2007 and it's still the right one.
A typical mistake: comparing this month's rent to this month's mortgage payment. That ignores property tax, insurance, maintenance (~1% of price/year), HOA, and the opportunity cost of your down payment sitting in equity instead of an S&P index fund. Honest math usually shifts the answer 2–4 years out.
Our calculator runs both sides of the comparison with realistic assumptions: maintenance 1% annual, closing costs 2.5% upfront, opportunity cost at 6% (S&P long-term average), and rent inflation from the BLS CUUR0000SEHA rent CPI sub-index. It surfaces the year you cross even — and the AI verdict ($19) re-runs the analysis at +1% rate and −10% rent to test how sensitive your break-even is.
- Home price: $450,000
- Down payment + closing: $108,000
- Monthly P&I + tax + ins.: $2,814
- Equivalent rent (today): $2,400/mo
- Rent CPI growth (5yr): +29.08%
- Maintenance 1%/yr: $4,500/yr
- Break-even: Year 6.2
"Don't buy unless you'll stay 5 years" is a reasonable starting point because closing costs and selling costs (~8–10% combined) eat into anything shorter. But the right horizon depends on price-to-rent ratio in your specific zip code. High-ratio markets like SF, Austin, or NYC often need 7–10 years to break even; low-ratio Sunbelt markets can break even in 3–4.
BiggerPockets reader surveys cluster around 1% of price annually for SFR averaged across a 10-year hold. New construction can run 0.5% for the first 5 years, then jumps when HVAC, roof, and appliances hit their replacement cycle. Older homes (pre-1980) often run 1.5% or more. Adjust this assumption in the calculator to match your specific property.
Because your $100K down payment isn't free — if you invested it in an S&P index fund instead, you'd historically average 7–10% annual returns. Most rent-vs-buy calculators ignore this and bias toward buying. We use 6% (conservative S&P) as the opportunity cost rate, which is honest enough to change the answer in expensive markets.
Not always. Real (inflation-adjusted) home appreciation in the US averages 1–2% annually long-term, not the 5–8% headline numbers from the last decade. In flat or declining markets, renting + investing the down payment in stocks has beaten buying over 30-year horizons. The break-even horizon framing handles this correctly by including realistic appreciation in the buy side.