How it works
Comparing rent to a mortgage payment alone is misleading. Buying also builds equity (ownership), while rent money is gone forever — but buying has closing costs (~2–5%), selling costs (~6%), maintenance and less flexibility.
This calculator nets out equity and selling costs for an apples-to-apples total cost over your time horizon.
Frequently asked questions
What is the 5% rule?
A shortcut: if annual rent is below 5% of a home's price, renting often wins; above 5%, buying often wins. Untaxed, unlevered comparison.
How long until buying pays off?
Typically 3–7 years, depending on appreciation and closing costs. Short stays almost always favor renting.
Does equity count as savings?
Yes — principal payments are forced savings. That's why buying usually wins long-term even when monthly costs look similar.
Disclaimer: This calculator provides estimates for educational purposes only and is not financial, tax, or legal advice. Consult a qualified professional before making financial decisions.