Rent vs. buy calculator
Compare the net worth of buying a home against renting and investing the difference, year by year.
Method: Monthly simulation, 3% closing costs, 6% selling costsReviewed Oct 2026
Your numbers
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yrs
Results
Break-even year
Year 6
When buying first pulls ahead
Buying ahead after 10 yrs
$51,590
Difference in net worth
Year-1 cost of owning
$2,523/mo
vs $2,200/mo rent
Net worth if you buy $238,784 (56%)Net worth if you rent $187,194 (44%)
Buying comes out $51,590 ahead if you stay 10 years.
Formula
Buy = V·(1 − s) − B + Pₒ Rent = Pᵣ
With your numbers
Buy = $537,567·(1 − 0.06) − $271,284 + $4,755 = $238,784 Rent = $187,194
In plain EnglishThe renter invests the $92,000 a buyer would spend upfront, plus any month where renting is cheaper. The buyer builds equity and invests any month where owning is cheaper. Buying first pulls ahead in year 6. If you stay 10 years, buying leaves you $51,590 better off.
- 1Upfront cash: down payment + 3% closing$92,000
- 2Monthly mortgage payment (30-yr)$2,022.62
- 3Year-1 owner cost incl. tax & upkeep$2,522.62
- 4Home value after 10 yrs$537,567
- 5Loan balance after 10 yrs$271,284
- 6Buyer net worth (after 6% selling cost)$238,784
- 7Renter portfolio$187,194
YearRentBuyBuy − rent
1$101,580$70,857−$30,723
2$111,109$86,291−$24,818
3$120,565$102,330−$18,234
4$129,923$119,001−$10,923
5$139,159$136,332−$2,827
6$148,245$154,354$6,110
7$157,172$173,123$15,951
8$166,602$193,366$26,764
9$176,598$215,216$38,618
10$187,194$238,784$51,590
11$198,426$264,186$65,760
12$210,331$291,547$81,215
13$222,951$320,998$98,047
14$236,328$352,681$116,352
15$250,508$386,745$136,237
16$265,539$423,351$157,812
17$281,471$462,666$181,196
18$298,359$504,873$206,514
19$316,261$550,163$233,903
20$335,236$598,741$263,505
21$355,351$650,823$295,472
22$376,672$706,641$329,969
23$399,272$766,440$367,169
24$423,228$830,483$407,255
25$448,622$899,047$450,425
26$475,539$972,428$496,889
27$504,072$1,050,940$546,869
28$534,316$1,134,918$600,603
29$566,375$1,224,718$658,343
30$600,357$1,320,717$720,360
What does “invest the difference” mean?
Whichever option costs less each month invests the savings at your expected return. The renter also invests the down payment and closing costs they did not spend.
Why does buying lose in the first few years?
Closing and selling costs are large one-time charges. It takes several years of appreciation and principal paydown to recover them.