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Should I Rent or Buy a House?

Should I rent or buy a house?

See what buying and renting each cost, month by month, and when buying would catch up for how long you plan to stay.

One Click Answers · Should I Rent or Buy a House?
oneclickanswers.com/should-i-rent-or-buy-a-house · Printed
About this tool & how to use it

What it does

Compare renting with buying a home over 5, 10 or more years, with the mortgage, taxes, upkeep, selling costs and the return on invested money, and see when buying catches up.

How to use it

  1. Enter the home price, your down payment, the mortgage rate and length, the rent you would pay, and how many years you expect to stay.
  2. Open "More costs and options" to change property tax, insurance, upkeep, closing and selling costs, rent increases, price growth and the return on money you would invest instead.
  3. Press "Get a detailed answer" for the full breakdown, charts, side-by-side scenarios and a plain-language explanation of how the answer was worked out.

Cash you put in up front. Under 20% usually means paying mortgage insurance, which this page does not add.

Use a rate you have been quoted. 6.5 is a placeholder, not a quote.

For a home like the one you would buy.

Whole years from 1 to 30. The result depends a great deal on this.

More costs and options

Look up the rate for the area. 1.1 is a placeholder.

An allowance for upkeep. Owners often budget about 1%; replace it with your own.

Agent fees and closing costs paid by the seller.

Nobody knows this. The page shows what happens at other values.

What the money kept by renting could earn. A guess, not a promise.

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Assumptions

  • The mortgage rate, property tax, insurance, upkeep, closing and selling costs, rent increases, price growth and investment return that fill the form are placeholders. Replace them with your own quotes and expectations.
  • Growth and returns are steady every year. Real prices, rents and markets move up and down.
  • Left out: mortgage insurance on small down payments, income-tax effects, moving costs, a renter's deposit and major repairs beyond the upkeep allowance.
  • Everything you enter, including any income or budget, is worked out in your browser and is never sent anywhere or saved.

Printed from oneclickanswers.com. Results are estimates based on what was entered; see the assumptions above.

How we calculated this

The mortgage payment and balance come from the same payment schedule as the Mortgage Payment calculator. Each month the buyer also pays property tax, upkeep, insurance and any HOA fees; the renter pays rent and renter's insurance.

The renter is assumed to invest the money a buyer would have tied up in the down payment and closing costs, and each month to invest (or withdraw) the difference between the two monthly costs.

After the years you choose, the buyer sells the home and pays selling costs and the remaining mortgage. The page compares what each person would own at that point and finds the month from which buying stays level or ahead.

Home price growth, rent increases and the investment return are your assumptions. The page never says buying or renting is better in general, only what your numbers show.

Formulas and details
  • Monthly payment = loan x r / (1 - (1 + r)^-n), with r = rate / 12 and n the number of months.
  • Home value after m months = price x (1 + growth)^(m / 12). Rent in year k = rent x (1 + rent increase)^(k - 1).
  • Renter investments after each month = previous x (1 + return)^(1/12) + (buyer cost - renter cost). Start = down payment + closing costs.
  • Position = renter investments - (sale price - selling costs - mortgage balance). Positive means renting is ahead.

Assumptions

  • The mortgage rate, property tax, insurance, upkeep, closing and selling costs, rent increases, price growth and investment return that fill the form are placeholders. Replace them with your own quotes and expectations.
  • Growth and returns are steady every year. Real prices, rents and markets move up and down.
  • Left out: mortgage insurance on small down payments, income-tax effects, moving costs, a renter's deposit and major repairs beyond the upkeep allowance.
  • Everything you enter, including any income or budget, is worked out in your browser and is never sent anywhere or saved.

Example

Input: A $400,000 home with $80,000 down and a 6.5% mortgage for 30 years, against $2,200 a month rent, staying 7 years

Result: Under these assumptions, buying would cost about $2,847.62 a month at first and renting about $2,220.00; buying needs $92,000 up front, and the page shows which choice is ahead after 7 years.

Questions

Is it better to rent or buy?

It depends on how long you stay, the price, the rate, rents and what you could earn elsewhere. This page shows how your own numbers play out and how sensitive the answer is to them.

Why does the answer change so much with the years I stay?

Buying has large costs at the start and at the end, so a short stay favors renting. A longer stay spreads those costs out and lets the loan balance fall.

Why include money the renter invests?

Cash used for a down payment cannot also be invested. Counting it keeps the comparison fair to both sides.

Does this include mortgage insurance or taxes on gains?

No. Those depend on your situation and are listed as left out.

Last reviewed 2026-10-09. Report an incorrect result

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