Mortgage WellRent vs Buy Calculator
Renting is not throwing money away, and buying does not automatically build wealth. Start from your local price-to-rent ratio and see which position leaves you further ahead — and in which year.
Buying pulls ahead in
Never
Not within 30 years on these assumptions. Change the ratio or the return to see what would flip it.
Shown in future dollars, not adjusted for inflation.
- Buying does not pull ahead within 30 yearsOn these assumptions renting stays ahead for the whole period. That is a real result, not an error — it usually means the investment return is high relative to home appreciation, or rent is low relative to the price. Try the sensitivity view before treating it as settled.
What you'd pay each month
If you buy
$2,955/mo
- Mortgage interest
- $1,733
- Property tax
- $417
- Insurance
- $182
- Maintenance
- $333
- Money gone
- $2,665
- Principal→ your equity
- $289
If you rent
$2,200/mo
- Rent
- $2,200
- Money gone
- $2,200
No property tax, no insurance on the building, no maintenance, no HOA. The landlord carries all of it — and prices it into the rent, which is why the comparison is closer than the empty column makes it look.
Owning costs $755/month more out of pocket. But $289 of that payment is principal, which stays yours — so on money you actually spend, owning costs $465/month more. Month one. Owner costs rise with the value of the house, rent rises at its own rate, and the split between interest and principal shifts every month.
Buying does not pull ahead within 30 years.
Net position, year by year
Show data table
| Year | Buyingequity if sold | Rentingportfolio after tax |
|---|---|---|
| 1 | $74,616.76 | $103,167.25 |
| 2 | $94,074.64 | $121,535.58 |
| 3 | $114,413.78 | $141,325.93 |
| 4 | $135,676.30 | $162,686.73 |
| 5 | $157,906.52 | $185,781.63 |
| 6 | $181,150.98 | $210,792.19 |
| 7 | $205,458.60 | $237,918.66 |
| 8 | $230,880.86 | $267,382.36 |
| 9 | $257,471.89 | $299,428.14 |
| 10 | $285,288.61 | $334,326.40 |
| 11 | $314,390.89 | $372,376.14 |
| 12 | $344,841.74 | $413,907.86 |
| 13 | $374,303.03 | $459,286.99 |
| 14 | $403,657.18 | $508,916.92 |
| 15 | $434,409.59 | $563,244.25 |
| 16 | $466,631.14 | $622,761.70 |
| 17 | $500,396.68 | $688,014.56 |
| 18 | $535,785.00 | $759,605.08 |
| 19 | $572,879.25 | $838,198.75 |
| 20 | $611,767.12 | $924,531.25 |
| 21 | $652,541.13 | $1,019,415.50 |
| 22 | $695,298.81 | $1,123,750.14 |
| 23 | $740,143.20 | $1,238,527.71 |
| 24 | $787,459.36 | $1,365,121.78 |
| 25 | $837,589.35 | $1,504,971.89 |
| 26 | $890,702.57 | $1,659,466.15 |
| 27 | $946,979.87 | $1,830,137.95 |
| 28 | $1,006,614.84 | $2,018,681.33 |
| 29 | $1,069,813.58 | $2,226,967.68 |
| 30 | $1,136,796.83 | $2,457,064.34 |
Where each side's money comes from
Each side's result is made of two parts: the money that went into something that grows, and what it gained. Owning grows through the house rising in value. Renting grows through a portfolio compounding on money that was never tied up in a down payment.
Buying
- Gain on the home
- $897,359
- Investment gains
- $3,253
- Put into the home
- $400,000
- Your down payment plus the loan paid down — the part of your payments that stays yours.
- Invested
- $11,618
- In the months owning cost less than renting would have.
- Net position
- $1,136,797
- If you sold in year 30: selling costs and any tax on the gain come out of it.
- Total paid
- $1,453,100
- $400,000 into the home + $11,618 invested + $1,041,482 spent on interest, tax, insurance, upkeep, HOA and closing costs.
Renting and investing
- Investment gains
- $2,658,772
- Invested
- $197,108
- The down payment and closing costs you did not spend, plus every month owning would have cost more.
- Net position
- $2,457,064
- After tax on the gains.
- Total paid
- $1,453,100
- $197,108 invested + $1,255,992 spent on rent.
$400,000 into the home + $11,618 invested · $1,041,482 spent
$197,108 invested · $1,255,992 spent on rent
Both sides paid the same. Each gets the same budget every month, and whichever home costs less invests the difference. What differs is how much of it went into something that grows.
$411,618 put in + $725,179 gained after selling costs and tax = $1,136,797
$197,108 put in + $2,259,956 gained after tax = $2,457,064
Each bar is the net position from the card above: what you would walk away with.
The comparison turns on which of those two engines runs faster — the appreciation rate on the whole house, against the investment return on the money a down payment would have tied up. Both are set above, and both are forecasts. Shown in future dollars, not adjusted for inflation.
What would have to be true
Three of the four inputs above are forecasts, so a single break-even year would be more confident than the numbers deserve. These are the points where the answer flips, holding everything else where you set it.
Buying wins if returns stay below
7.1%
Above that, renting and investing stays ahead for the whole term.
...or if a comparable place rents for over
$2,712.82
A price-to-rent ratio of 12.3 or lower. This is the one you can check against real listings.
| Return \ appreciation | 2% | 3% | 4% | 5% |
|---|---|---|---|---|
| 4% | yr 12 | yr 7 | yr 4 | yr 3 |
| 6% | yr 22 | yr 11 | yr 6 | yr 4 |
| 8% | never | never | never | never |
| 10%yours | never | never | never | never |
| 12% | never | never | never | never |
Each cell is the year buying pulls ahead at that pairing. “Never” means renting and investing stays ahead for the whole term — a real result, not an error.
What each year costs, owning versus renting
Rent is money gone — but so is most of a mortgage payment. Principal is the only line that comes back; interest, property tax, insurance, upkeep are as gone as rent is. Comparing the full payment against rent is what produces “renting is throwing money away”, so the columns are split here and the comparison worth making is cost of owning against rent.
Owning costs you
$1,035,394.80
Interest, tax, insurance, upkeep over 30 years. Gone, like rent.
Renting costs you
$1,255,991.76
Rent over the same period, growing at the rate you set.
Renting costs more by
$220,596.96
Owning is the cheaper monthly proposition here — the comparison still turns on what the down payment would have earned.
Equity you build
$320,000.00
Principal. The only part of the payment you get back when you sell.
| Year | What you pay to own | Money that does not come back | ||||||
|---|---|---|---|---|---|---|---|---|
| Interest | Principalto equity | Property tax | Insurance | Upkeep | Total paidout of pocket | Cost of owningtotal less principal | Rent | |
| 1 | $20,694.68 | $3,576.76 | $5,000.04 | $2,184.00 | $3,999.96 | $35,455.44 | $31,878.68 | $26,400.00 |
| 2 | $20,455.16 | $3,816.28 | $5,199.96 | $2,271.36 | $4,160.04 | $35,902.80 | $32,086.52 | $27,192.00 |
| 3 | $20,199.56 | $4,071.88 | $5,408.04 | $2,362.20 | $4,326.36 | $36,368.04 | $32,296.16 | $28,007.76 |
| 4 | $19,926.87 | $4,344.57 | $5,624.28 | $2,456.76 | $4,499.52 | $36,852.00 | $32,507.43 | $28,848.00 |
| 5 | $19,635.90 | $4,635.54 | $5,849.28 | $2,554.92 | $4,679.40 | $37,355.04 | $32,719.50 | $29,713.44 |
| 6 | $19,325.44 | $4,946.00 | $6,083.28 | $2,657.16 | $4,866.60 | $37,878.48 | $32,932.48 | $30,604.80 |
| 7 | $18,994.22 | $5,277.22 | $6,326.64 | $2,763.48 | $5,061.24 | $38,422.80 | $33,145.58 | $31,522.92 |
| 8 | $18,640.79 | $5,630.65 | $6,579.72 | $2,874.00 | $5,263.68 | $38,988.84 | $33,358.19 | $32,468.64 |
| 9 | $18,263.69 | $6,007.75 | $6,842.88 | $2,988.96 | $5,474.28 | $39,577.56 | $33,569.81 | $33,442.68 |
| 10 | $17,861.33 | $6,410.11 | $7,116.60 | $3,108.48 | $5,693.28 | $40,189.80 | $33,779.69 | $34,446.00 |
| 11 | $17,432.03 | $6,839.41 | $7,401.24 | $3,232.80 | $5,921.04 | $40,826.52 | $33,987.11 | $35,479.44 |
| 12 | $16,973.98 | $7,297.46 | $7,697.28 | $3,362.16 | $6,157.80 | $41,488.68 | $34,191.22 | $36,543.84 |
| 13 | $16,485.27 | $7,786.17 | $8,005.20 | $3,496.68 | $6,404.16 | $42,177.48 | $34,391.31 | $37,640.16 |
| 14 | $15,963.82 | $8,307.62 | $8,325.36 | $3,636.48 | $6,660.24 | $42,893.52 | $34,585.90 | $38,769.36 |
| 15 | $15,407.42 | $8,864.02 | $8,658.36 | $3,782.04 | $6,926.76 | $43,638.60 | $34,774.58 | $39,932.40 |
| 16 | $14,813.81 | $9,457.63 | $9,004.68 | $3,933.24 | $7,203.72 | $44,413.08 | $34,955.45 | $41,130.36 |
| 17 | $14,180.39 | $10,091.05 | $9,364.92 | $4,090.56 | $7,491.96 | $45,218.88 | $35,127.83 | $42,364.32 |
| 18 | $13,504.58 | $10,766.86 | $9,739.56 | $4,254.24 | $7,791.60 | $46,056.84 | $35,289.98 | $43,635.24 |
| 19 | $12,783.51 | $11,487.93 | $10,129.08 | $4,424.40 | $8,103.24 | $46,928.16 | $35,440.23 | $44,944.32 |
| 20 | $12,014.14 | $12,257.30 | $10,534.20 | $4,601.40 | $8,427.36 | $47,834.40 | $35,577.10 | $46,292.64 |
| 21 | $11,193.24 | $13,078.20 | $10,955.64 | $4,785.36 | $8,764.44 | $48,776.88 | $35,698.68 | $47,681.40 |
| 22 | $10,317.38 | $13,954.06 | $11,393.88 | $4,976.88 | $9,115.08 | $49,757.28 | $35,803.22 | $49,111.80 |
| 23 | $9,382.83 | $14,888.61 | $11,849.64 | $5,175.96 | $9,479.64 | $50,776.68 | $35,888.07 | $50,585.16 |
| 24 | $8,385.73 | $15,885.71 | $12,323.64 | $5,382.96 | $9,858.84 | $51,836.88 | $35,951.17 | $52,102.68 |
| 25 | $7,321.84 | $16,949.60 | $12,816.48 | $5,598.24 | $10,253.28 | $52,939.44 | $35,989.84 | $53,665.80 |
| 26 | $6,186.68 | $18,084.76 | $13,329.24 | $5,822.16 | $10,663.32 | $54,086.16 | $36,001.40 | $55,275.72 |
| 27 | $4,975.52 | $19,295.92 | $13,862.40 | $6,055.08 | $11,089.92 | $55,278.84 | $35,982.92 | $56,934.00 |
| 28 | $3,683.22 | $20,588.22 | $14,416.80 | $6,297.24 | $11,533.44 | $56,518.92 | $35,930.70 | $58,642.08 |
| 29 | $2,304.40 | $21,967.04 | $14,993.52 | $6,549.12 | $11,994.84 | $57,808.92 | $35,841.88 | $60,401.40 |
| 30 | $833.21 | $23,435.67 | $15,593.28 | $6,811.08 | $12,474.60 | $59,147.84 | $35,712.17 | $62,213.40 |
| Total | $408,140.64 | $320,000.00 | $280,425.12 | $122,489.40 | $224,339.64 | $1,355,394.80 | $1,035,394.80 | $1,255,991.76 |
Assumptions used
Assumption set 2026-09-07
- Cost to buy
- $6,087config
Title, origination, appraisal, recording and an inspection allowance. Fitted on conventional purchase loans reported under HMDA rather than taken as a share of the price — closing costs are mostly fixed, so they do not scale with the house.
- Investment return
- 10%user input
Nominal, so it must be read against the nominal home appreciation below rather than compared to a real return. This is the single input that moves the answer most.
- Home appreciation
- 4%user input
Nominal, matching the investment return.
- Rent growth
- 3%user input
- Mortgage interest deduction
- Not includeddefault
Since the 2017 standard-deduction increase only about one filer in ten itemizes, so for most people this is worth nothing. Excluding it makes buying look slightly worse than it may be for you — if you itemize, expect buying to do somewhat better than shown.
Rent vs Buy Comparison
Generated · Assumption set 2026-09-07
How this calculator works
The useful question is not whether rent is cheaper than a mortgage payment — that comparison ignores both that mortgage payments build equity and that a down payment could have been invested instead. This calculator compares net worth. The buyer accumulates equity and appreciation while paying interest, property tax, insurance, maintenance and transaction costs. The renter invests the down payment and any month where owning would have cost more, and pays rent that rises over time. Whichever side has the smaller housing bill in a given month invests the difference, so the cash-flow gap is carried by the portfolios rather than counted twice.
Reviewed for calculation accuracy and clarity by the Mortgage Well Team ·
When to use this
- You can afford to buy but are not sure it beats renting and investing.
- You are weighing a short stay against a long one — the holding period usually decides it.
- You want to know what would have to be true for buying to win where you live.
Methodology
The price-to-rent ratio is the home price divided by a year of rent. It is the only input here you can verify rather than forecast, and it dominates the result: below roughly 13 buying tends to win, above roughly 18 renting tends to. Everything is computed in nominal terms and deflated for display when you choose today's dollars — that matters because a fixed mortgage payment shrinks in real terms every year while rent that rises with inflation holds its value, which is a genuine advantage of buying that a real-terms model can accidentally omit.
price-to-rent = home price / (monthly rent x 12)
BUY equity (value - balance) - selling costs - gain tax
+ the buyer's portfolio, for months when renting cost more
RENT the renter's portfolio, after tax on gains
break-even = first year buying leads and keeps leadingAssumptions
- Investment return, home appreciation and rent growth are forecasts, not facts. They move the answer more than anything except the price-to-rent ratio.
- Nominal and real figures switch as a set. Comparing a nominal return against a real appreciation rate makes renting win regardless of the other inputs.
- The renter actually invests the difference every month. Many people do not, and the comparison assumes they do.
- Capital gains tax is applied to investment growth; the primary-residence exclusion ($250,000 single, $500,000 married) is applied to home gains.
- The mortgage interest deduction is NOT included. Since 2017 only about one filer in ten itemizes, so for most people it is worth nothing — but if you itemize, buying does somewhat better than shown.
- Retirement accounts cannot absorb a down payment: IRA and 401(k) limits are far below a typical one, so most of it would sit in a taxable account.
- Rent control caps annual increases rather than freezing rent, and exemptions for newer buildings, single-family homes and condos are wide.
Example
A $400,000 home against $2,200 a month in rent is a price-to-rent ratio of 15.2 — borderline. At a 10% nominal return and 4% appreciation, renting and investing stays ahead for the full thirty years. Drop the ratio to 12 (the same home against $2,778 rent) and buying pulls ahead by year 4. Keep the ratio and drop the return to 7% instead, and buying wins by around year 6. The ratio and the return decide it; almost nothing else comes close.
Frequently asked
- Is renting really throwing money away?
- No, and neither is buying automatically building wealth. Rent buys housing without maintenance, transaction costs or price risk; a mortgage buys equity but also interest, upkeep and roughly 8% in round-trip transaction costs. Which wins depends mostly on the price-to-rent ratio in your market and how long you stay.
- What is a good price-to-rent ratio?
- Below about 13, buying tends to win fairly quickly. Between 13 and 18 it is genuinely close and the holding period decides. Above about 18, renting and investing tends to stay ahead unless appreciation is unusually strong. Across US counties the median is around 18.
- Why does the calculator often favour renting?
- Because it assumes the renter invests the difference and earns the return you selected. At a 10% return against 4% home appreciation, that is a high bar for buying to clear. Lower the return, raise appreciation, or find a lower price-to-rent ratio and the answer flips. The point is to show what would have to be true, not to recommend one over the other.
- Does it include tax benefits of owning?
- It includes the primary-residence capital gains exclusion but not the mortgage interest deduction, because only around one filer in ten itemizes since the 2017 standard-deduction increase. If you do itemize, buying does somewhat better than shown here.
Sources and references
Helpful consumer references used to explain assumptions on this page. These are educational pointers, not regulatory endorsement.
- CFPB — Loan Estimate explainer — consumer guidance on what a real lender Loan Estimate contains; this calculator is not one
- Internal — fully-amortizing fixed-rate formula — standard P&I formula, taxes/insurance divided to monthly amounts
Related calculators
Related guides
Estimates only. This calculator is not a loan offer, loan approval, official Loan Estimate, Closing Disclosure, tax advice, legal advice, or financial advice. Actual payments, rates, taxes, insurance, mortgage insurance, closing costs, and loan terms may vary. Contact a qualified lender, tax professional, or financial advisor for guidance.