How renting and buying are compared
- Owning costs: mortgage payments, property tax, insurance, maintenance and HOA fees, plus closing costs at the start.
- Renting costs: rent and renter's insurance, rising each year.
- The fair comparison: the renter invests the down payment, closing costs and any monthly savings. The buyer invests the savings in years when owning is cheaper.
- At the end: the buyer sells (paying selling costs and the remaining loan); the renter has their investments.
Work out the exact payment with the mortgage calculator.
Frequently asked questions
How does the calculator decide whether renting or buying is better?
It compares your net worth in each case. A buyer owns the home's value minus the remaining mortgage and selling costs. A renter invests the down payment and closing costs instead, plus any money saved each year when renting is cheaper than owning. Whichever ends with more is the better deal.
Why does the number of years matter so much?
Buying has large one-time costs: closing costs when you buy and agent fees when you sell. Over a few years those costs often outweigh the benefits. The longer you stay, the more home value growth and mortgage payoff work in your favor.
What investment return should I use?
Use what you'd realistically earn on money you don't put into a house. A balanced investment portfolio has historically returned around 5–7% a year before inflation, but returns are never guaranteed. A savings account would be lower.
Does it include tax benefits?
No. Mortgage interest and property tax deductions only help if you itemize, which most people don't since the standard deduction increased. Leaving them out keeps the comparison simple and conservative.