See the year when buying overtakes renting, using the full cost of each.
Deciding whether to rent or buy is a major financial decision, and the honest answer depends on how long you stay. This calculator compares the net cost of owning and renting year by year in Your Area: it counts closing costs, mortgage interest, taxes, insurance, maintenance and the cost of selling, then credits the equity you build and the appreciation you capture. On the renting side it counts rent increases and credits the growth of the down payment and savings a renter keeps invested. Pick your state to start from the live MonitorBankRates average rate and the Census median home value, property tax and insurance cost where you live.
Use your state's rate and housing costs
Loads your state's average mortgage rate, median home value, property tax and homeowners insurance into the buying scenario.
Compare Renting vs. Buying
Enter both scenarios. Results update as you type.
Buying, net cost over 7 years
Renting, net cost over 7 years
Net cost of owning vs. renting by year
Net cost is what each path has cost you if you sold or moved at the end of that year. Lower is better. Where the lines cross is the break even point.
Year by year
| Year | Owning outlay | Home equity | Net cost to own | Rent paid | Renter's investments | Net cost to rent |
|---|
Renting vs. Buying the Median Home Right Now
As of September 21, 2026, with the MonitorBankRates national average 30 year fixed rate at 6.974%, buying the U.S. median home valued at $332,700 with 20% down costs about $2,416 per month to own once you add principal and interest of $1,766, the median property tax bill, homeowners insurance and 1% a year for maintenance. Whether that beats renting depends on local rents, how long you stay and what your down payment could earn elsewhere; the calculator above finds the year buying pulls ahead for your numbers.
| Monthly cost to own the U.S. median home, 20% down, 30 year fixed at 6.974% | Monthly |
|---|---|
| Principal and interest | $1,766 |
| Property tax (median, Census) | $260 |
| Homeowners insurance (median, Census) | $112 |
| Maintenance (1% of value per year) | $277 |
| Total monthly cost to own | $2,416 |
How to Use the Rent vs. Buy Calculator
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Enter the buying scenario
Add the home price you are considering, your down payment, the mortgage rate and term, and the yearly tax, insurance and maintenance costs. Picking your state fills in the local medians. Use the affordability calculator first if you are not sure what price range fits your income.
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Enter the renting scenario
Type in the monthly rent for a comparable property. Be honest about what you would actually rent: not the cheapest possible apartment, but a place comparable in size and location to the home you would buy. Add the return you expect on money you keep invested instead of putting it into a house.
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Set how long you plan to stay
Most rent vs. buy comparisons break even between years 4 and 8. If you are likely to move sooner, the buying scenario almost always loses on a pure cost basis because closing and selling costs have not been spread over enough years.
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Adjust appreciation, rent growth and inflation
Defaults are 3% annual home appreciation, 3% annual rent increases and 2.5% cost inflation. Adjust based on local conditions in Your Area if you have a sense of the trend, and try a pessimistic case (0% appreciation) to see how much the answer depends on prices rising.
Should You Rent or Buy?
The right answer depends as much on lifestyle as on math. Buying makes sense for a particular life stage and a particular set of circumstances. Renting makes sense for others. Here is the honest trade off:
Buying often makes sense when
- You will stay in the home at least 5 to 7 years
- You have a 20% down payment plus 3 to 6 months of expenses left over
- Your job and income are stable
- You want to build equity instead of paying a landlord's mortgage
- The local price to rent ratio is under about 15
- You are ready for the responsibility of maintenance, repairs, and property taxes
Renting often makes sense when
- You might move within 5 years for work, family, or lifestyle reasons
- You do not have a 20% down payment yet without depleting savings
- The local price to rent ratio is above about 20
- You would rather invest the down payment in stocks for potentially higher returns over decades
- You want flexibility and no maintenance responsibilities
- Mortgage rates are very high and you expect them to fall
One frame that helps: if a one point rate drop or a $50,000 home price change would flip your answer, you are on the borderline. Wait, save more, or look at different price points. The biggest financial mistakes in housing come from forcing a decision when the math is marginal.
The Rent vs. Buy Decision in Your Area
Choosing between renting and buying a home in your state involves weighing a complex set of financial and lifestyle factors. While buying often builds equity, it also comes with significant upfront costs and ongoing responsibilities.
How does the calculator decide which is cheaper?
It simulates each year you stay. For buying it adds up closing costs, mortgage payments, taxes, insurance, HOA, maintenance and PMI, then subtracts what you would walk away with if you sold that year: the home's value minus selling costs and the remaining loan balance. For renting it adds up rent and renters insurance, then subtracts the investment growth on the down payment and closing costs you never spent, plus any years when renting cost less than owning. The lower net cost wins, and the year the lines cross is your break even point.
What are the hidden costs of buying a home?
Beyond your mortgage, taxes, and insurance, homeownership includes maintenance (budget 1% to 2% of home value per year), possible HOA fees, closing costs of 2% to 5% of the loan amount, and 5% to 7% in commissions and fees when you sell. These are why buying rarely wins in the first few years.
Is renting just throwing money away?
Not necessarily. Renting offers flexibility, predictable monthly costs, and no responsibility for maintenance. The money saved on a down payment and maintenance can be invested. A $60,000 down payment invested for 30 years at 8% grows to roughly $600,000, potentially competitive with home equity built over the same period, depending on the market. The calculator credits the renter with that growth.
How long should I plan to live in a home to make buying worthwhile?
Generally, it takes at least 4 to 8 years for buying to be more financially advantageous than renting, primarily because of upfront closing costs and selling costs at the end. This break even point varies with your local market in Your Area. In high cost areas with low rents relative to prices, the break even can stretch to 10 years or more.
How much should I budget for home maintenance?
The standard rule of thumb is 1% to 2% of the home's value per year. On a $400,000 home, that is $4,000 to $8,000 annually for repairs, replacements, and routine maintenance. Older homes and larger homes tend toward the higher end. Budget it as a fixed monthly cost so it is not a surprise.
What is the price to rent ratio and how do I use it?
Divide a home's purchase price by 12 months of rent for a comparable property. A ratio under 15 generally favors buying; 15 to 20 is borderline; above 20 generally favors renting. If a $400,000 home would rent for $2,500 a month, the ratio is 13.3, which favors buying. The same home renting for $1,500 a month gives a ratio of 22.2, which favors renting. The calculator shows the ratio for your inputs.
What if I have less than 20% for a down payment?
You can still buy with as little as 3% to 5% down on a conventional loan, or 3.5% on an FHA loan. The trade off is private mortgage insurance (PMI), which adds 0.3% to 1.5% of the loan amount per year to your payment until you reach 20% equity. The calculator adds PMI automatically and removes it at 78% loan to value. Run the numbers both ways; sometimes waiting another year to save more is cheaper than paying PMI for several years.
Does the calculator account for tax benefits?
No. Mortgage interest and property taxes are deductible only if you itemize deductions on your federal taxes. Since the 2017 tax law nearly doubled the standard deduction, most homeowners no longer benefit from itemizing; only roughly 10% of taxpayers itemize today, mostly higher income households in high tax states. If you will take the standard deduction, the tax benefit of homeownership is essentially zero in your math.
