Rent Vs Buy Calculator: Is app德扑圈官方网址home Ownership Right For You?
Buying a app德扑圈官方网址home isn't always a good financial move. Renting isn't necessarily a waste of money. Our simple rent vs buy calculator can help you decide whether it makes more sense for you to rent or buy a app德扑圈官方网址home.
The rent vs buy debate can get exceptionally heated. For some, renting for a second longer than you have to is akin to setting fire to your hard-earned cash. Others see app德扑圈官方网址home ownership not as the fulfillment of the American Dream but as a financial prison, limiting your mobility and liquidity, and sucking up money for interest, repairs, and taxes.

Neither of these views is entirely correct.

Whether you rent or buy is a personal decision

Renting can be the right move for people in the right circumstances—for instance, those who don’t plan to stay where they are for very long, or who live in an expensive city where app德扑圈官方网址home prices are simply out of reach.

Buying a app德扑圈官方网址home, on the other hand, is great for someone who plans to settle down for the long haul, and who doesn’t want to be beholden to the whims of a landlord, and doesn’t mind doing standard repairs.

Renters aren’t throwing away money for nothing (they get a place to live in return!) and app德扑圈官方网址home owners often get a great deal of satisfaction in exchange for their (admittedly large) outlay of time and money.

But there are a lot of variables in every individual’s personal rent vs buy calculation. Not just matters of life goals and personal temperament, either. It’s easy to look at a mortgage payment on Zillow and think, “Oh man, buying would be so much cheaper!”

And, in the long term, it just might be. But in the shorter term, there are fees, taxes, and mortgage interest to take into account.

Use our calculator to visualize your long-term costs

That’s where our rent vs own calculator comes in. It tells you, in the simplest terms, how long you need to stay in your house to break even, and how long you’ll need to stay in your house before buying it becomes a serious money-saving decision.

Rent vs buy calculator: Our assumptions

For most of the numbers, we looked at national averages over the past 15 years.

Rental market

For rent, we found a national average of 3 percent yearly increases, so we assumed rent prices would keep going up at that same rate into the future.

Real estate values

For year-over-year increases in app德扑圈官方网址home value, we found a national average of 3.5 percent (according to the Case-Schiller app德扑圈官方网址home Price Index). San Francisco, Miami, and Washington, D.C. had higher averages (up to a 5 percent yearly increase), but even New York City (3.8 percent yearly increase) was close to the national average over 15 years. Yes, you could make a fortune on a house whose value might shoot skyward. But the vast majority of app德扑圈官方网址home prices in the US increase only a little faster than inflation.


For the past 15 years, inflation was low—2.2 percent yearly. We used this number to calculate future costs like app德扑圈官方网址home maintenance.

Property taxes

For property taxes, we assumed taxes equal to 1.5 percent of the app德扑圈官方网址home’s value, which is the national average.

Mortgage interest, insurance, and tax deductions

In calculating “costs,” we included the interest on your mortgage, but not the principal. For taxes, we included any mortgage tax deduction that exceeded the standard deduction. We assumed singleness.

Private mortgage insurance is included until you hit 20 percent on your mortgage, then it goes away. If your down payment was already 20 percent, then it’s not included at any time.

No one can make the decision to buy a app德扑圈官方网址home for you. But taking a good, hard look at the numbers can help you decide what’s right for you.

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About the

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Lauren Barret is a staff writer at Money Under 30. She has an MFA in creative writing from The Ohio State University, and a BA from Kenyon College. She lives in Portland, Maine.

Article comments

We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their s; they do not represent the views or opinions of Money Under 30. Comments have not been reviewed or approved by any advertiser, nor are they reviewed, approved, or endorsed by our partners. It is not our partner’s responsibility to ensure all posts or questions are answered.
Diana M says:

This was a great article and very accurate. I have a good lender in Jupiter/West Palm Beach, FL. He is upfront and
very informative. I had to seek a new lender after first one was not giving me enough or accurate answers. And by putting 25% or more down on a condo avoids those “condo questioners” which you can risk loosing time and money through the process. A GOOD lender in FL will tell you all of that.
I have been renting over 20 years. Lived in FL the past 10. Now that I know I am staying in one place and love it, health and income are stable….this is a GOOD time for me to buy. Market is steadily increasing again, so now is it.

Darren says:

Nice article! I think you are spot on; renting or buying is a personal decision. It is hard not to focus on the financial positives of owning a app德扑圈官方网址home, like tax (interest) deductions and app德扑圈官方网址home value appreciation. This is especially true if you call California app德扑圈官方网址home. Having said that, it is nice to have the freedom to pick-up and move without a lengthy sales process or have a large chunk of assets tied-up in a app德扑圈官方网址home.

Sean says:

When you sell your house, don’t you basically get the money back that you put into it (assuming things go somewhat smoothly)? Whereas if you rent you won’t ever see that money again. I just don’t see how renting could be a good financial decision if you can afford a down payment. Even if you just break even on a house you effectively lived for free for a while right?

Lauren Barret says:

Not quite. You never get back closing costs (which are 4 percent of the cost of the house when you buy, 6 percent when you sell), property taxes, mortgage interest (and in the early years of your mortgage, you’re paying more interest than principal), private mortgage insurance (if your down payment is under 20 percent), or maintenance costs. (And if you rent, your landlord may cover some of your utilities, so buying means you’d be responsible for those, too.)

Diana M says:

In Florida rent is steadily increasing every year. It makes more sense to buy, I think it depends where you live. Property taxes are a good right off, don’t forget if its “app德扑圈官方网址homesteaded” meaning if you LIVE in the place you have a mortgage on, you are entitled to more tax deductions. And owning a condo, Water is almost always included in the “HOA” fees. In some condo communities, water, cable and wifi. Have to look around!

Bethany says:

Your property appreciates over time so you are getting everything you mentioned back plus 3-5% annual return rate. So it’s better to buy than rent because you are investing your money into something in the long run.


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