🧮 Rent vs Buy Break-Even Analyzer

Enter your scenario below. We calculate the exact year buying beats renting.

🏠 Buying Inputs

Home Price ($)

Down Payment (%)

= $80,000

Mortgage Rate (%)

Property Tax (%/yr)

Maintenance (%/yr)

HOA ($/month)

Insurance ($/yr)

Home Appreciation (%/yr)

Closing Costs (%)

Selling Costs (%)

🔑 Renting Inputs

Monthly Rent ($)

Rent Annual Increase (%)

Alternative Investment Return (%/yr)

S&P 500 historical avg = 10% (7% after inflation)

Renters Insurance ($/yr)

Security Deposit ($)

⚙️ Advanced Settings

Marginal Tax Bracket (%)

For mortgage interest deduction estimate

General Inflation (%/yr)

Break-Even Year

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Enter your scenario and click Calculate

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Total Cost of Buying (30yr)

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Total Cost of Renting (30yr)

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Net Home Equity (30yr)

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Invested Down Payment (30yr)

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Monthly Mortgage (P&I)

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Total Monthly Buy Cost

📊 Sensitivity Analysis: Break-Even Year

How the break-even year changes with different home prices and investment returns.

📖 The Complete Guide to Rent vs Buy Decisions

The rent-versus-buy decision is one of the most significant financial choices you will ever make. It involves hundreds of thousands of dollars over decades, yet most people rely on the outdated rule of thumb that renting is throwing money away. This guide breaks down the real math.

Why Most Rent vs Buy Calculators Get It Wrong

The vast majority of online calculators commit a critical error: they ignore the opportunity cost of your down payment. When you put $80,000 down on a home, that money can no longer earn returns in the stock market. Over 30 years at 7% annual returns, that $80,000 would grow to over $609,000. Any honest comparison must account for this.

The Break-Even Year Explained

The break-even year is when the total net wealth from buying (home equity minus all costs) equals the total net wealth from renting (invested down payment + invested monthly savings). Before the break-even year, renting produces more wealth. After it, buying wins.

The single biggest mistake first-time buyers make is ignoring what their down payment could earn elsewhere. A $100,000 down payment invested in a diversified index fund at historical returns would be worth over $760,000 in 30 years. That is the true cost of buying. — Marcus Donnelly, CFP, FinScope Analytics

Hidden Costs of Homeownership

Property Taxes: Average 1.1% of home value nationally, but ranges from 0.27% (Hawaii) to 2.47% (New Jersey)
Maintenance and Repairs: Budget 1-2% of home value annually
HOA Fees: $200-$800/month in many areas
Homeowner Insurance: $1,500-$3,000/year
Closing Costs: 2-5% of purchase price when buying
Selling Costs: 5-8% of sale price

🔬 Our Methodology

Buying Wealth Calculation

Each year, we compute the homeowner net position as: Home Value times (1 - Selling Cost%) - Remaining Mortgage Balance - Cumulative Non-Equity Costs

Renting Wealth Calculation

The renter invests the down payment and any monthly savings into a diversified portfolio. We compound the invested down payment at the specified return rate.

Break-Even Detection

We iterate year by year, computing both wealth tracks. The break-even year is where Buy Wealth first exceeds Rent Wealth. We interpolate between years for decimal precision.

❓ Frequently Asked Questions

The break-even year is the point in time when the total wealth from buying a home equals the total wealth from renting and investing the difference.

When you use $80,000 as a down payment, you lose the potential investment returns on that money. At 7% annual returns, $80,000 grows to $609,000+ over 30 years.

No. When you rent, you pay for housing. When you buy, you also pay for housing plus interest, taxes, maintenance, insurance, and transaction costs.

The S&P 500 has historically returned about 10% per year nominally, or about 7% after inflation. We default to 7%.

Yes! Click the Share button to copy a URL with all your inputs encoded. Anyone who opens the link will see your exact scenario.

Rent vs Buy Break-Even Calculator With Opportunity Cost & Real Numbers