What is the break-even point for buying a home?

It's the number of years you need to stay in the home for ownership to become cheaper than renting the equivalent space. Typical break-evens are 3 to 7 years in the US, but can be much higher in expensive coastal cities and lower in stable mid-sized markets.

Decision Â· Home

Is it cheaper to buy or rent a home?

Get a realistic comparison that accounts for mortgage, taxes, insurance, maintenance, home appreciation, closing/selling costs, and the opportunity cost of your down payment.

Home & mortgage

Home price

Down payment (%)

Mortgage rate (%)

Term (years)

Years you'll stay

Ownership costs

Property tax (% / yr)

Insurance ($ / yr)

Maintenance (% of home / yr)

Home appreciation (% / yr)

Closing cost (% buy)

Selling cost (% sale)

Renting & investing

Monthly rent

Rent increase (% / yr)

Investment return if you rent (%)

Preferences

Locale

Currency

Buy Owning

Net cost-

Monthly mortgage-

Sale proceeds-

Rent Renting

Net cost-

Invested down pmt. grows to-

How we compare

Owning net cost = down payment + closing + all monthly costs (mortgage, tax, insurance, maintenance) âˆ’ sale proceeds (home value minus selling costs and remaining loan balance). Renting net cost = total rent paid (growing each year) minus the investment gain on the down payment & closing invested at your chosen return rate. Lower net cost wins.

Cumulative cost by year

Owning net cost Renting net cost

FAQ

Buy vs rent â€” frequently asked questions

Is buying always better than renting?

No. Buying wins when you stay long enough to amortize upfront costs (down payment, closing, repairs). Renting wins for short stays, volatile markets, or when investing the saved down payment earns more than the home appreciates net of costs. Our calculator compares both scenarios honestly.

What is the break-even point for buying?

It's the number of years you need to stay in the home for ownership to become cheaper than renting the equivalent space. Typical break-evens are 3â€“7 years in the US, but can be much higher in expensive coastal cities and lower in stable mid-sized markets.

Does this include maintenance and opportunity cost?

Yes. We include property tax, insurance, maintenance as a % of home value, closing costs, selling fees, and the opportunity cost of the down payment (assumed invested at your chosen return rate). That's how we get a fair apples-to-apples comparison.

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