Buying a home isn't always a good financial move. Renting isn't necessarily a waste of money. Our simple rent vs buy calculator can help you decide whether it makes more sense for you to rent or buy a home.

The rent vs buy debate can get exceptionally heated. For some, renting for a second longer than you have to is akin to setting fire to your hard-earned cash. Others see home ownership not as the fulfillment of the American Dream but as a financial prison, limiting your mobility and liquidity, and sucking up money for interest, repairs, and taxes.

Neither of these views is entirely correct.

Whether you rent or buy is a personal decision

Renting can be the right move for people in the right circumstances—for instance, those who don’t plan to stay where they are for very long, or who live in an expensive city where home prices are simply out of reach.

Buying a home, on the other hand, is great for someone who plans to settle down for the long haul, and who doesn’t want to be beholden to the whims of a landlord, and doesn’t mind doing standard repairs.

Renters aren’t throwing away money for nothing (they get a place to live in return!) and home owners often get a great deal of satisfaction in exchange for their (admittedly large) outlay of time and money.

But there are a lot of variables in every individual’s personal rent vs buy calculation. Not just matters of life goals and personal temperament, either. It’s easy to look at a mortgage payment on Zillow and think, “Oh man, buying would be so much cheaper!”

And, in the long term, it just might be. But in the shorter term, there are fees, taxes, and mortgage interest to take into account.

Use our calculator to visualize your long-term costs

That’s where our rent vs own calculator comes in. It tells you, in the simplest terms, how long you need to stay in your house to break even, and how long you’ll need to stay in your house before buying it becomes a serious money-saving decision.

Rent vs buy calculator: Our assumptions

For most of the numbers, we looked at national averages over the past 15 years.

Rental market

For rent, we found a national average of 3 percent yearly increases, so we assumed rent prices would keep going up at that same rate into the future.

Real estate values

For year-over-year increases in home value, we found a national average of 3.5 percent (according to the Case-Schiller Home Price Index). San Francisco, Miami, and Washington, D.C. had higher averages (up to a 5 percent yearly increase), but even New York City (3.8 percent yearly increase) was close to the national average over 15 years. Yes, you could make a fortune on a house whose value might shoot skyward. But the vast majority of home prices in the US increase only a little faster than inflation.


For the past 15 years, inflation was low—2.2 percent yearly. We used this number to calculate future costs like home maintenance.

Property taxes

For property taxes, we assumed taxes equal to 1.5 percent of the home’s value, which is the national average.

Mortgage interest, insurance, and tax deductions

In calculating “costs,” we included the interest on your mortgage, but not the principal. For taxes, we included any mortgage tax deduction that exceeded the standard deduction. We assumed singleness.

Private mortgage insurance is included until you hit 20 percent on your mortgage, then it goes away. If your down payment was already 20 percent, then it’s not included at any time.

No one can make the decision to buy a home for you. But taking a good, hard look at the numbers can help you decide what’s right for you.

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About the author

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Lauren Barret is a staff writer at Money Under 30. She has an MFA in creative writing from The Ohio State University, and a BA from Kenyon College. She lives in Portland, Maine.