Compare the real cost of renting versus buying over the years you plan to stay — including equity, appreciation and the return on money a renter can invest.
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Total cost to buy—
Total cost to rent—
Home equity at sale—
Total rent paid—
Estimates only. CalcPenny is not a lender, broker or financial adviser and this
is not financial advice. Verify figures before making decisions.
What "cheaper" really means here
Renting and buying are hard to compare because the money moves so differently. A buyer pays
a big lump sum up front and builds equity; a renter pays smaller amounts but keeps their
cash free to invest. This calculator puts both on the same footing: it adds up everything
each path costs over the years you'll stay, then subtracts what you get back — home equity
and appreciation for the buyer, investment growth on the freed-up cash for the renter.
The levers that flip the answer
Three inputs move the result the most: how long you stay (buying needs
time to beat the upfront costs), the gap between mortgage rate and home
appreciation, and the investment return a renter can earn. Try
nudging the years up and down to find your breakeven — the point where the verdict switches
from renting to buying. Treat the number as a well-informed estimate, not a guarantee.
Frequently asked questions
Is it cheaper to rent or buy?
It depends on how long you stay, the price-to-rent ratio, interest rates and what return you could earn by investing the money instead. Buying usually wins the longer you stay, because purchase costs are spread over more years and you build equity. This calculator compares the total cost of each over your time frame.
What is the "breakeven" time for buying?
It is the number of years you need to own before buying becomes cheaper than renting, once you account for closing costs, maintenance and the return you give up on your down payment. In many markets it is around 4–7 years, but it varies a lot — change the years and watch the verdict flip.
Why does the calculator include an investment return?
A renter does not tie up cash in a down payment and closing costs, so they can invest that money. A fair comparison credits the renter with the return they could earn on it. Lower the return if you would just spend the money instead.
What costs does buying include?
Down payment, ~3% buying closing costs, mortgage principal and interest, property tax and maintenance (which also stands in for insurance) — minus the equity and home-price appreciation you keep when you sell (less ~6% selling costs). It is an estimate, not a substitute for advice from a lender.