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Rent vs Buy Calculator
The rent vs buy debate is one of the biggest financial decisions you will make. Enter your numbers to see the true total cost of each path.
US historical average: ~3.5%/year
Sources & Methodology
- S&P Case-Shiller U.S. National Home Price Index (FRED), historical home price appreciation data going back to 1987
- FHFA All-Transactions House Price Index (FRED), quarterly U.S. home price index since 1975
- Freddie Mac Primary Mortgage Market Survey (PMMS), weekly 30-year and 15-year fixed mortgage rate benchmarks
- 30-Year Fixed Rate Mortgage Average (FRED / Freddie Mac), full historical rate series since 1971
More Questions About This Calculator
By Sean Baldwin · Last reviewed July 2026
The Verdict
Worth it if: buying costs at least 15% less than renting over your expected time horizon and you plan to stay in the home 5 or more years.
Not worth it if: you plan to move within 3 years, or renting comes out cheaper (or within 5%) once closing costs, maintenance, and property taxes are factored in.
Break-even threshold: most buyers need 4 to 5 years in the home just to recoup closing costs; the score climbs sharply once buying's total cost advantage crosses 15% over your time horizon.
Frequently Asked Questions
Is it cheaper to rent or buy a home right now?
In 2026, with mortgage rates elevated, buying is often more expensive month-to-month than renting in most US markets. However, over a 7-10+ year horizon, buying still builds equity and long-term wealth for most homeowners. The right answer depends on how long you plan to stay, your local market, and your financial situation.
How long do you need to stay in a home for buying to be worth it?
The typical break-even point in 2026 is 5-8 years, though this varies significantly by market. In expensive cities like San Francisco or NYC, break-even can be 10+ years. In more affordable markets, you may break even in 3-4 years.
What costs do first-time homebuyers forget to budget for?
Common overlooked costs include: closing costs (2-5% of purchase price), property taxes (0.5-2.5% annually), homeowner insurance ($1,200-2,000/year), HOA fees if applicable, and maintenance (budget 1-2% of home value annually for repairs and upkeep).
Does renting throw money away?
Not necessarily. Renting provides flexibility, zero maintenance costs, and the ability to invest the difference between rent and ownership costs. If invested wisely, the down payment and monthly savings can generate returns that rival home equity gains. The 'renting is throwing money away' idea oversimplifies a complex decision.
What is a good price-to-rent ratio?
The price-to-rent ratio divides home price by annual rent. Under 15 favors buying, 15-20 is neutral, over 20 generally favors renting. Most major US cities in 2026 have ratios of 20-30+, which tilts toward renting from a pure financial standpoint unless you plan to stay long-term.
Example: Mid-Market Buyer, 7-Year Horizon
At a 7-year horizon with a 6-year break-even, buying is borderline, stay longer and it clearly wins; sell at year 5 and you've lost money versus renting. A score in the 50–65 range means the decision depends on your specific market and how long you actually plan to stay.
Why the rent vs. buy decision is more complex than most people think
The conventional wisdom, "buying builds equity, renting throws money away", ignores a large number of real costs of homeownership. When you own, you pay mortgage interest (not equity), property taxes, HOA fees, maintenance (budget 1–2% of home value annually), and insurance. You also have opportunity cost on your down payment: $80,000 down payment invested in an index fund at 7% annually grows to $313,000 over 20 years. The rent vs. buy decision is really a comparison between two different ways of deploying capital, and the answer depends heavily on how long you plan to stay, local price-to-rent ratios, and your investment alternatives.
The price-to-rent ratio and what it tells you
The price-to-rent ratio divides a home's purchase price by its annual rent. A ratio under 15 generally favors buying; 15–20 is a toss-up; above 20 typically favors renting. In San Francisco, ratios routinely hit 40–50, meaning you'd pay 40–50 years of rent to buy the equivalent property. In Cleveland or Detroit, ratios of 8–12 make buying almost always the better financial choice. Your local ratio matters more than national trends. You can calculate it simply: if a home sells for $600,000 and rents for $2,500/month ($30,000/year), the ratio is 20, right at the toss-up line.
The break-even horizon: how long you need to stay
Buying a home has significant upfront transaction costs: closing costs run 2–5% of the purchase price, and if you sell within a few years, real estate agent commissions eat another 5–6%. On a $400,000 home, you might spend $20,000 buying it and $24,000 selling it, that's $44,000 that has to be covered by appreciation and equity before you break even versus renting. Most financial analyses find that buying makes sense only if you stay at least 5–7 years. The longer your time horizon, the more buying tends to win. If you expect to move within 3 years, renting is almost always the better financial choice.
What the "rent vs. buy" calculators often miss
Most calculators forget to account for the reinvestment of the difference. If renting costs $2,000/month and buying costs $3,200/month (including taxes, insurance, and maintenance), and a renter invests that $1,200 difference every month, the renter can accumulate significant wealth. Over 10 years at 7% returns, $1,200/month grows to over $200,000. The right comparison isn't rent payment vs. mortgage payment, it's total renting cost including invested savings vs. total owning cost including equity and appreciation.
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How We Calculate Your Score
The Worth It Score compares total buying costs to total renting costs over your time horizon. The ratio of cost savings drives the result — if buying costs 5–15% less than renting over your horizon, you score in the 68–80 range. Scores above 80 mean buying is clearly cheaper; below 52 means renting is the better financial choice given your inputs.
- · Cost advantage: buying saves >30% vs. renting → 92; saves 15–30% → 80; saves 5–15% → 68; near parity → 52; renting cheaper by 5–15% → 38; renting saves >30% → 12
- · Time horizon bonus: staying 10+ years adds 8 points
- · Short stay penalty: staying 3 years or less subtracts 20 points
This score is a financial model, not a guarantee. It does not account for home price appreciation, opportunity cost of the down payment, or personal factors like job stability and lifestyle flexibility.
Cite this calculator: Worth It Calculators, "Should You Buy a House Right Now or Keep Renting? (2026 Calculator)," worthitcalculators.com/rent-vs-buy/ (updated July 2026).