Net worth year by year
The lines cross around year 6 — before that, renting is ahead.
Net worth after 10 years
Details
About the rent vs buy calculator
The classic “renting is throwing money away” advice misses half the picture. Buying ties up a large down payment and adds property tax, insurance, maintenance and closing costs — money a renter could invest instead. The honest question isn’t “rent or buy?” but “which leaves me with a higher net worth after the years I’ll actually stay?”
This calculator answers that. It grows your home’s value and your rent each year, pays down the mortgage month by month, and — crucially — invests every dollar the cheaper option frees up. Whoever ends with more wealth wins, and the chart shows the exact year buying pulls ahead of renting (the “break-even” point).
Buying almost always loses in the first few years because closing costs (2–5%) and selling costs (5–6%) are front-loaded. Over time, a fixed mortgage payment plus rising rents tilt the math toward buying. The break-even year is when owning finally overtakes renting — if you’ll move before then, renting usually wins.
Because nobody knows future home appreciation, rent growth or investment returns, every one of those is an adjustable slider here. Move them and watch the verdict flip — that’s the point. Treat the result as “if these assumptions hold,” not a prediction.
Frequently asked questions
Is it better to rent or buy a home?
It depends on how long you stay, local prices vs rents, and what return you could earn by investing instead. Buying tends to win the longer you stay because upfront and selling costs get spread over more years, while a fixed mortgage payment beats rising rents. This calculator shows the exact break-even year for your numbers.
What is the break-even point in rent vs buy?
It is the year at which buying leaves you with more net worth than renting. Before it, the renter (who invested the down payment and cost difference) is ahead; after it, the buyer’s home equity and fixed payments win. If you plan to move before the break-even year, renting is usually the better financial choice.
Does the calculator account for investing the down payment?
Yes. It uses the fair “invest the difference” method: the renter invests the money the buyer sinks into the down payment and closing costs, plus any month where owning costs more than renting. That opportunity cost is what makes the comparison honest rather than biased toward buying.
What home appreciation rate should I use?
US homes have appreciated roughly 3–4% per year over the long run, though it varies widely by area and period. The calculator defaults to 3%. Try lower and higher values to stress-test the decision — small changes in appreciation can flip the verdict.
Are property taxes and maintenance included?
Yes. The “yearly home costs” input covers property tax, insurance and maintenance as a percentage of the home’s value (1.5% by default), and closing and selling costs are separate inputs. You can adjust all of them under “More assumptions.”