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Rent vs Mortgage Calculator

A mortgage payment that matches your rent doesn't make buying the cheaper choice. Compare total costs, equity and net worth, not just the monthly bill.

Updated 7 November 2026 · By RentBuyAtlas Editorial Team · Methodology

Market
The home & mortgage
USD
Purchase price of the home you would buy.
%
Share of the price paid upfront in cash.
%
Annual interest rate on the loan.
yrs
Years to repay the loan (amortization).
Renting
USD
Rent for a home similar to the one you would buy.
%
Expected annual rent increase. Also used to grow fees.
USD
Contents insurance, tenant fees, municipality fees.
Owning costs (yearly)
%
Recurring tax paid only by owners, % of home value.
%
Repairs and upkeep, % of home value. 1% is a common rule.
%
Buildings/home insurance, % of home value.
USD
Condo, strata, co-op or service charges.
Transaction costs
%
Stamp duty / transfer tax, legal, lender and agent fees.
%
Agent commission and legal fees when you sell.
Growth & returns
%
Expected annual home price appreciation.
%
What your savings would earn if invested instead.

United States defaults: Property tax varies from roughly 0.3% (Hawaii) to over 2% (New Jersey, Illinois). Mortgage interest is only deductible if you itemize. PMI typically applies below 20% down.

After 10 years

Renting comes out ahead by $41,369

Buying does not overtake renting within 30 years on these assumptions.

Break-even rent

$2,310/mo

If a comparable home rents for less than this, renting wins over 10 years.

Mortgage payment

$2,080/mo

Loan of $336,000 over 30 years at 6.3%.

Owning cost, month one

$3,007/mo

vs $2,115/mo to rent (incl. renter costs).

Cash needed to buy

$96,600

$84,000 deposit + $12,600 buying costs.

5% rule check

$1,750/mo

Your personalised rule: 5.6% → $1,957/mo. Rent below this favours renting.

Price-to-rent ratio

16.7

Gross rental yield 6.00%. Above ~20 usually leans rent.

$0$78.7K$157.4K$236.2K$314.9K012345678910
Buy Rent  ·  Net worth by year
Net worth if you buy: $273,500Home equity after selling costs $273,500
Net worth if you rent: $314,869Deposit, buying costs and monthly savings invested at 7%
Where the money goes over 10 years
Mortgage interest$196,974
Principal repaid (becomes equity)$52,596
Property tax$55,063
Maintenance$50,057
Insurance$27,532
Buying costs$12,600
Selling costs (at year 10)$35,547
Rent paid if renting$295,631
Renter extras$2,112
Year-by-year table
YearHome valueLoan leftBuy: net worthRent: net worthAnnual rent
1$434,700$332,100$76,518$114,589$25,200
2$449,915$327,946$94,973$133,329$26,082
3$465,662$323,524$114,198$152,855$26,995
4$481,960$318,814$134,228$173,203$27,940
5$498,828$313,800$155,099$194,413$28,918
6$516,287$308,459$176,851$216,523$29,930
7$534,357$302,773$199,523$239,578$30,977
8$553,060$296,718$223,158$263,622$32,061
9$572,417$290,270$247,802$288,702$33,184
10$592,451$283,404$273,500$314,869$34,345
How we calculate

Quick answer

With our US defaults, a $420,000 home has a $2,080 mortgage payment, almost the same as $2,100 rent. But owning costs about $3,007 a month once tax, insurance and maintenance are added, and after 10 years renting finishes around $41,000 ahead. Compare rent to the full cost of owning and the return your down payment would forgo, not to the mortgage alone.

Is a mortgage cheaper than rent?

A mortgage payment is often close to rent, but owning a home almost always costs more each month than the mortgage alone. With our US defaults, the mortgage on a $420,000 home is about $2,080 a month against $2,100 rent. The true monthly cost of owning is about $3,007, and over 10 years renting comes out roughly $41,000 ahead. A rent vs mortgage calculator is only useful if it counts everything the payment leaves out. This one does.

Comparing rent to a mortgage payment is how most people start, and it’s the most common mistake in the rent or buy decision. Rent is your whole housing cost. A mortgage payment isn’t.

How to use the rent vs mortgage calculator

  1. Enter the home and its comparable rent. Use the same property, or two very similar ones.
  2. Enter your actual mortgage quote. The 6.3% default is a long-run assumption. Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed average at 7.18% for the week of 5 November 2026.
  3. Read the monthly payment first, then ignore it. The monthly payment output is there so you can check it against a lender’s quote. The decision rests on the net worth comparison and the break-even rent.
  4. Check total unrecoverable costs. This output adds up everything you pay and never get back: interest, property tax, insurance, maintenance, closing costs and selling costs for the owner, and rent for the renter.

Worked example: same payment, different outcome

The mortgage. A $420,000 home with 20% down leaves a $336,000 loan. At 6.3% over 30 years, the amortization formula P = L × r Ă· (1 − (1 + r)^−n), with r = 0.00525 and n = 360, gives about $2,080 a month. That’s $20 less than the $2,100 rent.

The first month, side by side:

Monthly cost Owner Renter
Mortgage payment (principal + interest) $2,080 —
Property tax (1.1% a year) $385 —
Home insurance (0.55% a year) $193 —
Maintenance (1% a year) $350 —
Rent — $2,100
Renter’s insurance — $15
Total ~$3,007 ~$2,115

The owner pays about $890 more each month to start with. The calculator has the renter invest that difference, along with the $96,600 down payment and closing costs the renter didn’t spend. Both households are spending exactly the same cash each month. They just put it in different places.

Where the money goes over 10 years

10-year total Owner Renter
Mortgage interest ~$197,000 —
Principal repaid (builds equity) ~$53,000 —
Property tax ~$55,000 —
Maintenance ~$50,000 —
Home insurance ~$28,000 —
Closing costs (3%) ~$12,600 —
Selling costs (6% of sale price) ~$35,500 —
Rent paid — ~$296,000

The owner’s unrecoverable costs (everything except principal) add up to roughly $378,000. The renter’s come to about $298,000 including insurance. Owners do get something renters don’t: the home rises in value from $420,000 to about $592,000. Renters get investment growth on a starting portfolio of nearly $97,000.

The net result after 10 years is owner equity of about $273,500 against a renter portfolio of about $315,000. Renting leads by roughly $41,000, even though the mortgage was $20 cheaper than rent.

What rent equals a mortgage? Using the break-even rent

The most useful output for anyone comparing rent to a mortgage is the break-even rent. That’s the rent at which buying and renting leave you equally well off at your horizon. With the defaults over 10 years, it’s about $2,310.

That gives you a practical rule for this home. If you can rent something comparable for less than about $2,310, renting is the better financial choice. If comparable homes rent for more, buying is.

The break-even rent changes with the inputs that drive the result:

Scenario (10-year horizon) Mortgage payment Break-even rent
Defaults (6.3%) $2,080 ~$2,310
Rate 5.5% $1,908 ~$2,130
Rate 7.18% (Nov 2026 average) $2,276 ~$2,510
10% down at 6.3% (no PMI) $2,340 ~$2,300
Investment return 6% instead of 7% $2,080 ~$2,190

With 20% down and a 7% investment return, the break-even rent sits about $220 to $240 above the mortgage payment at every rate shown. Property tax, insurance and maintenance are large, but principal repayment and price growth claw much of them back. What’s left is roughly that gap. The last two rows show why there’s no universal rule, though. A smaller down payment raises the mortgage but leaves less money missing out on investment returns, so the break-even rent ends up slightly below the payment. A lower expected investment return narrows the gap to about $110.

Rent to mortgage calculator: how much home does my rent buy?

Some people use a “rent to mortgage calculator” the other way round: “I pay $2,100 in rent. What could I afford to buy for the same money?” Here’s the honest answer.

  • Principal and interest only: at 6.3% over 30 years, $2,100 a month supports a loan of about $339,000.
  • Full ownership cost: once you add 1.1% property tax, 0.55% insurance and 1% maintenance, the same $2,100 covers a home price of only about $293,000 with 20% down.

That’s around $130,000 less house than the payment-only figure suggests. Lenders’ affordability checks include tax and insurance, but they don’t include maintenance. The calculator does, and so should your budget.

Why the monthly payment comparison misleads

It ignores costs outside the payment. Tax, insurance, maintenance and HOA fees can add 40% to 50% to a mortgage payment. See hidden costs of owning a home for the full list.

It ignores transaction costs. Buying and selling a US home commonly costs around 9% of its value between them. A short stay rarely recovers that.

It ignores opportunity cost. A $96,600 down payment invested at 7% would grow to roughly $190,000 in 10 years. That return is a real cost of buying.

It ignores what the payment buys you. Early on, most of a mortgage payment is interest. Later, most of it is principal, so the same payment builds more equity each year. A fixed-rate payment also stays flat while rent typically rises.

The last point is why owning gets more competitive the longer you stay. Our guide to the rent vs buy break-even point goes further into timing.

Fixed mortgage vs rising rent: how the gap closes over time

The rent vs mortgage comparison isn’t fixed. A 30-year fixed payment stays at $2,080 for its whole life. Rent, property tax, insurance and maintenance all rise. Here are the yearly housing costs in the calculator with the US defaults:

Year Owner’s housing cost that year Renter’s housing cost that year Who spends less
1 ~$36,300 ~$25,400 Renter by ~$10,900
5 ~$37,900 ~$29,100 Renter by ~$8,800
10 ~$40,400 ~$34,600 Renter by ~$5,800
15 ~$43,300 ~$41,100 Renter by ~$2,200
20 ~$46,700 ~$48,800 Owner by ~$2,100
30 ~$55,600 ~$68,800 Owner by ~$13,200

Around year 18 the lines cross, and from then on the owner has spare cash to invest each month. Once the mortgage is paid off in year 31, the owner pays only tax, insurance and maintenance, while the renter’s rent keeps rising. This is the strongest argument for buying if you expect to stay for decades. It’s also why a short-horizon comparison of rent against a mortgage payment looks so different from a long-horizon one. Use the horizon input to see both views before you decide.

Mortgage or rent: decision checklist

  • Compare rent with the full monthly cost of owning, not with principal and interest.
  • Use your real rate quote. Every 0.5% changes the payment by roughly $100 to $110 on this loan.
  • Check whether comparable rent is above or below the break-even rent.
  • Add PMI if you’re putting down less than 20%.
  • Set the horizon to how long you’ll actually stay.
  • If you’d spend rather than invest the monthly difference, read renting and investing vs buying a house.

This page is educational, not financial advice. Get a written loan estimate before you make a decision.

Frequently asked questions

Is it smart to buy if my mortgage would be less than my rent?

Not automatically. The mortgage payment leaves out property tax, insurance, maintenance, HOA fees, closing and selling costs, and the investment return your down payment gives up. On a typical US home those extras come to about $925 a month before transaction costs. With our 10-year US defaults, the mortgage payment has to be roughly 10% below comparable rent just for the two options to break even.

How do I convert my rent into an affordable mortgage?

Work backwards from your total monthly housing budget, not from principal and interest alone. At 6.3% over 30 years, $2,100 a month covers principal and interest on about a $339,000 loan. Once 1.1% property tax, 0.55% insurance and 1% maintenance are included, the same $2,100 supports a home price of only about $293,000 with 20% down.

Which part of a mortgage payment builds wealth?

Only the principal. Interest is a cost, just like rent. In the first year of a $336,000 loan at 6.3%, about $21,000 of the roughly $25,000 you pay is interest. Over the first 10 years, interest totals about $197,000 and principal about $53,000. The rest of your equity comes from price appreciation.

What is the break-even rent?

It's the monthly rent at which renting and buying leave you with the same net worth at your chosen horizon. If you can rent a comparable home for less, renting wins. If comparable rent is higher, buying wins. With our US defaults over 10 years it's about $2,310, compared with a mortgage payment of $2,080.

Do higher mortgage rates always favour renting?

Usually, but not by themselves. At the 7.18% average Freddie Mac reported for early November 2026, the payment on a $336,000 loan rises to about $2,276 and the 10-year gap in renting's favour roughly doubles. Fast-rising rents or a low expected investment return can still tip things back toward buying. You can also refinance later if rates fall.

Does this calculator include PMI?

No. Private mortgage insurance usually applies in the US when you put down less than 20%, and it isn't modelled separately. If you put down less, add your PMI quote to the insurance input as a percentage of the home's value so the monthly comparison stays honest.

This calculator is for education and planning. It is not financial advice. Defaults for United States are illustrative late-2026 estimates; check current rates and fees locally.