Compare the long-term financial impact of renting versus buying a home over 10 years
Over 10 years, renting and investing the savings builds $286,155 compared to $259,102 in home equity from buying. Renting comes out ahead by $27,053.
Renting versus buying isn't just rent against a mortgage payment — it's the full cost of each path over time. This calculator models both: the buyer's mortgage, taxes, insurance, maintenance, and eventual sale proceeds against the renter's rent growth and the investment returns on money not tied up in a down payment.
The verdict usually hinges on how long you stay. Buying carries heavy one-time costs (closing costs on the way in, agent commissions on the way out) that need years of equity growth to overcome. Short stays favor renting; long stays increasingly favor buying.
No — rent buys housing, the same way a mortgage's interest, taxes, insurance, and maintenance buy housing. Only the principal portion of a mortgage payment builds equity, and it's small in the early years. The real comparison is total unrecoverable costs on each side, which this calculator does for you.
Commonly around 5+ years, because buying and selling costs (often 8–10% of the home's value combined) must be spread over your years of ownership. Expensive coastal markets can push the horizon longer; affordable markets with high rents can shorten it.
Maintenance and repairs (~1% of home value yearly), property tax increases, insurance premium growth, HOA dues, and the cost of selling. None of these build equity, and together they often exceed what new buyers expect.
A quick heuristic: multiply the home price by 5% and divide by 12 — if rent for a comparable home is below that number, renting may be the better financial choice. It approximates the owner's unrecoverable costs (property tax, maintenance, and cost of capital). It's a starting point, not a substitute for running your actual numbers.
A framework for deciding whether to rent or buy a home — it's not always as clear-cut as 'building equity.'