Should You Buy or Rent?
Compare monthly costs and wealth at your planned move-out year. Free, with no account required.
Published by RentalCalcs · Content and usability reviewed .
Data periods and program effective dates are shown separately. Report a correction.
How long will you stay?
Compare both paths at the year you expect to move.
Other Costs
Ongoing Costs
Maintenance Budget
Industry standard is 1-2% of home value annually. Many first-time buyers underestimate this.
= $5,706/year ($476/month)
$16,100 for 2026
Automatic amounts exclude age/blindness additions and dependent limits. Use a custom amount when needed; zero is allowed.
Tax Deductions
We compare buying with the deductions you could claim while renting.
Investment Assumptions
Renting and investing finishes $192K ahead
At your year 7 exit, before income taxes
Renting
Buying
How is "Final Wealth" calculated?(click to expand)
Renting Final Wealth
Down payment + closing costs invested in stocks, plus monthly savings (difference between buying and renting costs) invested over time.
Buying Final Wealth
Home value minus remaining mortgage minus selling costs (agent commissions, closing costs, repairs).
Key Takeaways
- Buying does not pull ahead within the 30 years modeled. Renting and investing finishes ahead at your year 7 exit, before income taxes.
- Estimated additional federal benefit: $2,713 in year 1. Shown separately; not included in wealth or monthly costs.
- Buying builds $27K in equity from principal payments, plus $87K from appreciation.
- Renting wins in 12 of 12 scenarios tested.
View assumptions used
Would this home make a good rental?
See the cash flow, cap rate, and 30-year returns if you bought it as an investment property instead.
Analyze as a RentalRenting Wins... But There's a Third Option
What if you could get the best of both worlds?
House hacking lets you live cheaper than renting while building equity like buying. It's like renting with training wheels for real estate investing.
$3,021
vs $3,452 buying alone
$202K
+$47K vs regular buying
$1,193/mo
From your other unit
The House Hack Calculator shows exactly how much you could save
Frequently Asked Questions
Why does changing property tax affect the renting scenario?
When buying costs increase (due to higher property taxes), the monthly cost difference between buying and renting grows. In the renting scenario, we assume you invest this "savings" (the difference between what a buyer pays and what a renter pays) in the stock market. So if buying costs more due to higher taxes, the renter has MORE money to invest each month, which leads to higher renting wealth over time.
Why is my buying wealth so low in Year 1?
Buying wealth includes selling costs (typically 7-10% of home value for agent commissions, closing costs, and repairs). In early years, most of your mortgage payment goes to interest, not principal, so you build equity slowly. Combined with selling costs, your net equity is much lower than your down payment initially. This is why buying usually only makes financial sense for longer time horizons (typically 5-7+ years).
How does the mortgage interest deduction work?
The Tax Impact tab estimates the additional federal deduction benefit from buying compared with renting. It applies the selected tax year’s standard deduction, SALT limits and a $750,000 limit on new qualified mortgage debt. It uses your entered marginal rate and is shown separately from the before-tax wealth results.
What's included in "Monthly Cost" for each scenario?
Renting: Base rent + renter's insurance + utilities + any additional costs (parking, storage, pet rent).
Buying: Mortgage principal & interest + property taxes + homeowner's insurance + HOA fees + utilities + maintenance (1-2% of home value annually) + PMI (if applicable).
How is "Final Wealth" calculated for each scenario?
Renting: Down payment (that you would have used to buy) invested in stocks + monthly savings invested, grown at your specified stock return rate over the time horizon.
Buying: Home value at end of time horizon − remaining mortgage balance − selling costs (agent commissions + closing costs + repairs, typically 7-10% of home value). Buying also includes invested monthly savings when owning costs less. Both paths are before income taxes; investment and home-sale capital gains taxes are not deducted.
What is the SALT cap and how does it affect my taxes?
The SALT cap depends on the tax year and income. For the supported filing statuses, the 2026 cap starts at $40,400 and phases down above $505,000 of modified AGI, with a $10,000 floor. The model uses entered AGI as a proxy. It includes eligible income or sales taxes plus property taxes, and applies the scheduled return to a $10,000 cap from 2030. See Tax Impact for sources and assumptions.
For landlords
Do you accept Section 8?
List your rental free on VoucherMatch and reach voucher holders searching your market. Every application shows the voucher type and household size up front.
Rent vs Buy by City
Start with regional housing references, then enter comparable homes. Reviewed city pages show the county, observation period and sources; the directory distinguishes older snapshots.
View all 580+ cities →Read the 10-year rent vs buy scenario comparison →Frequently asked questions
Is the buy vs rent calculator free?
The comparison is free with no account required. An optional paid report is available; it does not gate the free results.
How does it decide whether buying or renting wins?
It compares modeled wealth before income taxes at your chosen exit year. A difference within the larger of $1,000 or 5% of either ending balance is labeled similar wealth. Buying builds equity but carries closing costs, maintenance, taxes, and insurance. Renting costs less upfront and frees cash you can invest. The calculator shows which path finishes ahead under your assumptions and any later reversal. The federal deduction estimate is separate from wealth and monthly costs.
What is the Monte Carlo simulation?
The simulation varies appreciation and investment returns under its selected assumptions. The share of simulated outcomes favoring buying describes that model, not a measured probability of what will happen to your home or investments. Compare it with the fixed scenarios and your cash budget.
Is the calculator biased toward buying?
The result follows your inputs and time horizon. Either path can finish ahead, and a first break-even year can reverse later. Replace regional starting references with comparable homes and test less favorable cost and growth assumptions.