See whether renting or buying a home is cheaper over 5, 10, or 15 years
Enter the home price, monthly rent, interest rate, down payment and your expected time horizon. The calculator compares the total cost of renting against buying — including taxes, insurance, maintenance and the opportunity cost of your down payment — and tells you how long you'd need to stay for buying to win.
The answer depends on how long you plan to stay. Buying makes sense in the long run because you build equity, but renting is cheaper if you'll move within a few years. This calculator factors in all the hidden costs most people forget: property taxes, maintenance, insurance, closing costs, and the opportunity cost of your down payment.
Buying costs = mortgage payments + taxes + insurance + maintenance − principal paid down − expected home appreciation. Renting costs = rent payments (which grow with inflation). The crossover point is the number of years where cumulative buying costs fall below cumulative rent.
For a $400,000 home at 6.5% compared with market rent, buying becomes cheaper than renting if you stay about 8 years. Staying shorter than that, renting usually wins once you count closing costs, maintenance and the lost investment return on your down payment.
The rule of thumb is 5-7 years. That's how long it takes to build enough equity to cover closing costs on both buying and selling. If you might move sooner, renting is usually cheaper.
No — much of your mortgage payment in the early years goes to interest, not equity. And when you rent, the money you don't put toward a down payment can be invested and grow. Use the calculator above to see the actual math.