Rent vs. Buy Calculator

Compare the monthly and long-term costs of renting versus buying a home. Make informed housing decisions based on your financial situation and market conditions.

🏠 Rent vs. Buy Calculator

What is a Rent vs. Buy Calculator?

A Rent vs. Buy Calculator is a free online tool that helps you compare the financial implications of renting versus buying a home. It takes into account various factors including rent payments, home prices, mortgage rates, down payments, property taxes, insurance, maintenance costs, closing costs, and opportunity costs of invested capital.

This calculator is particularly useful for first-time homebuyers or anyone weighing housing options. It reveals breakeven points—the length of time you need to stay in a home for buying to become more cost-effective than renting—and provides a comprehensive view of total costs over time.

With AI-powered insights based on 2025 market data, our calculator helps you make informed decisions tailored to your financial situation and local market conditions.

How to Use the Rent vs. Buy Calculator

Enter your home purchase details: home price, down payment percentage, interest rate, and loan term.
Input additional buying costs: closing costs, property tax rate, insurance, HOA fees, and maintenance costs.
Provide rental information: monthly rent, rent increase rate, renter's insurance, and security deposit.
Add your financial details: investment return rate, federal and state tax rates, and filing status.
Click 'Calculate' to see a comprehensive comparison of buying vs. renting costs over 30 years, including the breakeven point.

Latest Market Insights (2025)

Current Market Trends

According to the latest 2025 data, renting remains more affordable than buying in most U.S. metropolitan areas. Realtor.com's June 2025 report shows that renting saves an average of $908 per month compared to buying in 49 out of 50 top metros, with Pittsburgh being the only exception where buying is cheaper.

Bankrate's 2025 study confirms this trend, finding that renting is cheaper in all 50 largest metros, with the national average mortgage payment ($2,768) being 38% higher than the average rent ($2,000). However, Empower's research notes that buying becomes cheaper in 18 out of 50 metros when mortgage rates are around 6.58%.

Key Factors to Consider

The median home price in Q2 2025 is $410,800, with average monthly rent at $1,300.
Metro-specific gaps vary significantly: San Jose has the highest buy-rent gap at 190.7%, while Detroit has the smallest at 2.3%.
Calculators incorporate inflation, rent and home appreciation rates, opportunity costs, and tax benefits.
Maintenance costs typically run 1-2% of home value per year, while investment returns (e.g., S&P 500) should be factored into opportunity costs.

Regional Variations

Rust Belt metros tend to favor buying more than coastal tech hubs. The renting advantage has shrunk recently in some markets, so it's important to reassess your decision as market conditions change. Always input accurate local data for the most reliable results.

Understanding the Costs

Buying Costs Explained

Mortgage Payment: Your monthly principal and interest payment based on the loan amount, interest rate, and term.
Property Tax: Annual tax based on your home's assessed value, which typically increases over time.
Home Insurance: Annual premium to protect your property against damage and liability.
Maintenance: Ongoing costs for repairs and upkeep, typically 1-2% of home value annually.
Closing Costs: One-time fees when buying (2-5%) and selling (6-10%) a home, including agent commissions and transfer taxes.
Home Appreciation: The potential increase in your home's value over time, which builds equity.

Renting Costs Explained

Monthly Rent: Your monthly payment to the landlord, which typically increases annually.
Renter's Insurance: Affordable coverage for your personal belongings and liability.
Flexibility: Easier to relocate without the burden of selling a property.
No Maintenance Costs: Landlord is responsible for major repairs and upkeep.

Opportunity Cost

When buying, your down payment and equity are tied up in the home. When renting, you can invest that money elsewhere (e.g., stocks, bonds) and potentially earn returns. Our calculator factors in these opportunity costs to give you a complete financial picture.

Frequently Asked Questions

Is it better to rent or buy in 2025?

It depends on your location, financial situation, and how long you plan to stay. In most major U.S. metros, renting is currently more affordable in the short term, but buying can be advantageous if you plan to stay 5+ years and can afford the upfront costs. Use our calculator with your specific numbers to get a personalized answer.

What is the breakeven point?

The breakeven point is the number of years you need to own a home for buying to become cheaper than renting. This varies by location and market conditions but typically ranges from 3 to 7 years in most markets.

Should I include tax benefits in my calculation?

Yes, homeowners can deduct mortgage interest and property taxes (up to certain limits), which reduces the effective cost of ownership. Our calculator automatically factors in these tax benefits based on your tax bracket and filing status.

How accurate is this calculator?

Our calculator uses industry-standard formulas and incorporates the latest 2025 market data. However, actual costs can vary based on specific properties, local market conditions, and personal circumstances. Use this as a guide, not a guarantee.

What if home prices drop?

Home price depreciation is a risk of ownership. You can adjust the 'Home Value Appreciation' field to a negative number to model scenarios where home values decline. This will show you the potential downside of buying in a declining market.

Should I factor in lifestyle preferences?

Absolutely. While our calculator focuses on financial factors, lifestyle considerations matter too. Homeownership offers stability and the freedom to customize your space, while renting provides flexibility and less responsibility. Consider both financial and personal factors in your decision.