Rent vs Buy Calculator

It depends on your local market, how long you plan to stay, mortgage rates, and home appreciation. Generally, buying becomes cheaper after 5-7 years due to equity building and fixed mortgage payments, while rents keep rising. This calculator helps you compare your specific situation.

The 5% rule suggests multiplying a home's value by 5% and dividing by 12 to get a monthly break-even rent. If you can rent for less than this amount, renting may be better financially. For a $400,000 home: $400,000 x 5% / 12 = $1,667/month break-even rent.

Most financial experts suggest buying only if you plan to stay at least 5-7 years. This gives enough time to offset closing costs (2-5% of home price), selling costs (5-6%), and the slow early equity building in an amortized mortgage.

Beyond the mortgage payment, buyers face property taxes (1-2% of home value), homeowners insurance, maintenance (1-2% of home value annually), HOA fees, closing costs, and eventual selling costs (5-6% in realtor commissions). These can add 30-50% to your monthly mortgage payment.