What the Calculator Measures
The rent vs. buy calculator compares the total cost of renting (rent payments + renters insurance + invested down payment returns) against the total cost of buying (mortgage interest, property taxes, insurance, maintenance, HOA, closing costs) while accounting for equity building and home appreciation.
The break-even point is the number of years after which buying becomes cheaper than renting on a cumulative basis. Before the break-even, renting costs less. After it, buying ahead. Most markets in 2025 have break-even periods of 4–8 years for median-priced homes.
The Key Inputs That Drive the Result
Key rent vs. buy calculator inputs and their directional effect
| Input | Impact on Result | 2025 Typical Values |
|---|---|---|
| Home purchase price | Higher price = longer break-even | Varies widely by market |
| Down payment % | Higher = less mortgage, more opportunity cost | 5–20% typical |
| Mortgage rate | Higher rate = buying looks worse | 6.3–7.0% in 2025 |
| Monthly rent (alternative) | Higher rent = buying looks better | Market-dependent |
| Annual home appreciation | Higher = buying looks better | 3–5% national average |
| Marginal tax rate | Higher = mortgage interest deduction worth more | 22–32% for most buyers |
| Investment return on down payment | Higher = renting looks better | 7% stock market assumption |
Real Example: Chicago vs. Austin
Chicago: $380,000 home, $2,100/month rent alternative, 6.5% mortgage, 2.5% appreciation. Calculator shows break-even at 4.5 years. After 10 years: buying saves $42,000 total. Austin: $580,000 home, $2,400/month rent, same rate and appreciation. Break-even at 8.2 years. After 10 years: buying saves only $11,000. At 7 years: renting still ahead by $18,000.
The Price-to-Rent Ratio: Quick Screening Tool
Price-to-rent ratio = home price ÷ annual rent. Below 15: buying typically makes clear financial sense. 15–20: it depends on your timeline. Above 20: renting and investing the difference often builds more wealth.
Run Your Rent vs. Buy Comparison
Enter your local prices and rent to find your personal break-even timeline.