Renting vs Buying Calculator

01Rent vs. Buy Calculator

03How the Comparison Works

Both households start with the same cash: the down payment plus closing costs. The buyer puts it into the house; the renter invests it at the investment return. Each month, whichever household has the lower housing bill invests the difference at the same return. At the end of the stay the buyer sells, pays the selling costs and repays the loan. Ending wealth is what each household has at that point: the buyer's sale proceeds plus any invested savings, and the renter's investment account. The gap between the two is the same as the gap between their net costs.

Break-even horizon: the shortest stay, in whole years, after which buying leaves more estimated wealth than renting with the same inputs. Buying usually starts behind because of closing costs and selling costs, and catches up as the loan is paid down and the home appreciates. The sensitivity table shows how much the result and the break-even year move when home appreciation or investment returns are a little higher or lower than you assumed.

Private mortgage insurance (PMI): with a conventional loan and less than 20% down, the calculator adds PMI at the rate you enter, charged on the original loan amount. Under the federal Homeowners Protection Act, the servicer must end PMI automatically on the date the principal balance is scheduled to reach 78% of the home's original value (generally the lower of the purchase price or appraised value), as long as payments are current, and no later than the month after the midpoint of the loan term. The calculator follows the scheduled balance and uses the purchase price as the original value. You can ask for cancellation earlier, at 80%, which this calculator does not assume. FHA and VA loans have their own mortgage insurance rules. Source: Consumer Financial Protection Bureau.

Mortgage rate: the default is the Freddie Mac Primary Mortgage Market Survey 30-year fixed average for the week of October 22, 2026 (freddiemac.com/pmms). It is a national average for borrowers with strong credit; your quoted rate may differ.