Quick answer
With our US defaults ($420,000 home, $2,100 rent, 6.3% mortgage, 20% down), renting and investing the difference finishes roughly $40,000 ahead after 10 years. Owning wins once rent rises above about $2,310 a month, or if prices grow faster, rates fall or your investments earn less. The result depends mostly on how long you stay and how rent compares with price.
Is it better to rent or own?
With typical US numbers in late 2026, renting a comparable home and investing the difference leaves you slightly wealthier than owning over 10 years, by roughly $40,000 on a $420,000 home. That gap is small enough to flip. Owning wins if rent is above about $2,310 a month for the same home, if prices rise faster than 3.5% a year, or if you canât reliably invest what renting saves you. This rent vs own calculator lets you test those conditions with your own numbers rather than a national average.
The question is not âIs a mortgage cheaper than rent?â It is âWhich path leaves me with more net worth by the time I would move or sell?â The calculator answers that by running both paths month by month.
How to use this rent vs own calculator
Start with the four inputs that move the result most:
- Home price and comparable rent. Use a real listing and the rent for a similar home in the same area. Donât compare a three-bed house youâd buy with a one-bed you rent now.
- Horizon. Set this to how long you realistically expect to stay. Buying and selling costs are fixed per transaction, so a short stay makes them weigh more.
- Mortgage rate. Use the rate youâve actually been quoted. The 6.3% default sits below the 7.18% average that Freddie Macâs Primary Mortgage Market Survey reported for 5 November 2026, so most buyers today should raise it.
- Appreciation and investment return. These are the two numbers nobody knows. Try a pessimistic and an optimistic case, not just the defaults.
The remaining inputs are property tax, maintenance, insurance, HOA fees, closing costs and rent growth. They matter, but theyâre easier to look up. US property tax ranges from roughly 0.3% of value in Hawaii to over 2% in New Jersey and Illinois, so replace the 1.1% default with your countyâs rate.
Why we chose these US defaults
The defaults describe a typical owner-occupied home bought with 20% down: a $420,000 price, $2,100 rent, a 30-year fixed loan, 3% closing costs, 6% selling costs, 1% a year for maintenance, and 3.5% annual growth in both prices and rents. The 7% investment return is meant to be an after-tax, long-run figure for a diversified stock portfolio. None of these is a forecast. Theyâre a sensible starting point you should edit.
Worked example: owning vs renting with the defaults
Buying. A 20% down payment on $420,000 is $84,000, and 3% closing costs add $12,600, so you need $96,600 in cash on day one. The remaining $336,000 is borrowed at 6.3% over 30 years. Using the standard amortization formula, payment = L Ă r Ă· (1 â (1 + r)^ân), where r = 0.063 Ă· 12 and n = 360. That gives a monthly payment of about $2,080.
On top of the mortgage, you pay property tax of about $385 a month, maintenance of about $350 and insurance of about $193. Your first month of ownership costs roughly $3,007.
Renting. Rent is $2,100 plus $15 for renterâs insurance, so $2,115. The renter puts the $96,600 into investments on day one and invests the roughly $890 a month that renting saves.
After 10 years. The home is worth about $592,000 and the loan balance is about $283,000. After 6% selling costs, the ownerâs equity is roughly $273,500. The renterâs portfolio is about $315,000. Renting leads by roughly $41,000.
The headline numbers are less useful than the two outputs below them:
- Break-even rent: about $2,310 a month. If a comparable home rents for less than this, renting wins over 10 years. If it rents for more, owning wins.
- Break-even year: none within 30 years, on these exact assumptions. Small changes, covered below, bring it within reach.
How does the time you stay change the answer?
How long you stay is the input people underrate most. The table below keeps every default the same and changes only the horizon.
| Years you stay | Owner net worth | Renter net worth | Leader | Break-even rent |
|---|---|---|---|---|
| 3 | ~$114,000 | ~$153,000 | Rent by ~$39k | ~$3,040 |
| 5 | ~$155,000 | ~$194,000 | Rent by ~$39k | ~$2,620 |
| 7 | ~$200,000 | ~$240,000 | Rent by ~$40k | ~$2,440 |
| 10 | ~$274,000 | ~$315,000 | Rent by ~$41k | ~$2,310 |
| 15 | ~$420,000 | ~$464,000 | Rent by ~$44k | ~$2,220 |
| 20 | ~$605,000 | ~$653,000 | Rent by ~$49k | ~$2,170 |
Look at the last column. The rent that makes owning worthwhile falls the longer you stay, from over $3,000 for a three-year stay to about $2,170 over 20 years. A longer stay spreads closing and selling costs over more years, and more of each payment goes to principal. Owning gets more competitive with time even when, as here, it never quite takes the lead.
What makes owning win instead of renting?
These are single changes from the defaults, with the 10-year outcome for each.
| Change from defaults | 10-year result |
|---|---|
| Home price $350,000 (same rent) | Owning ahead by ~$35,000; break-even in year 6 |
| Rent $2,500 instead of $2,100 | Owning ahead by ~$37,000; break-even in year 7 |
| Appreciation 4.5% instead of 3.5% | Owning ahead by ~$6,000 |
| Investment return 5% instead of 7% | Owning ahead by ~$5,000 |
| Mortgage rate 5.5% instead of 6.3% | Renting ahead by ~$6,000 (near even) |
| Mortgage rate 7.18% (Nov 2026 average) | Renting ahead by ~$81,000 |
| Property tax 2% instead of 1.1% | Renting ahead by ~$104,000 |
| Appreciation 2.5% instead of 3.5% | Renting ahead by ~$85,000 |
Two patterns stand out. The price-to-rent ratio is the single strongest signal. The price-to-rent ratio is the home price divided by a yearâs rent, and here it is 16.7. Bring it down to about 14 with a $350,000 home and owning comes out ahead. Second, rates and property tax matter more than most people expect. A 2% property tax state can turn a close call into a clear win for renting.
What owning gives you that a calculator canât price
A rent vs own comparison measures money. Some of the strongest reasons to own arenât financial, and some of the strongest reasons to rent arenât either.
Owning gives you:
- Control over the home: renovations, pets, decor, no landlord inspections.
- Protection from rent increases and non-renewal, since a fixed-rate payment never rises.
- Forced saving through principal repayment, which helps if you wouldnât invest otherwise.
- A leveraged asset. A 10% rise in a homeâs value is a 50% gain on a 20% down payment.
Renting gives you:
- Flexibility to move for work, family or a cheaper area without a 6% selling bill.
- Diversification. Your wealth isnât tied to one property in one neighborhood.
- Predictable maintenance. The landlord pays for the roof and the furnace.
- Liquidity. An investment account can be drawn on in a week, while home equity needs a sale or a loan.
Leverage works in both directions. If prices fall in the first few years, your down payment and closing costs can be wiped out. If youâre thinking about what else the money could do, read our guide to the opportunity cost of a down payment.
Owning versus renting: a decision checklist
Before you trust any rent vs own result, check these:
- Is the rent truly comparable? It should be the same size, area and quality as the home youâd buy.
- Is the horizon honest? If thereâs a real chance you move within five years, run a five-year case.
- Did you use your real mortgage quote? Rates in late 2026 are well above the 6.3% default.
- Is property tax local? Look up your county rate. Donât use the national default.
- Would you really invest the difference? If not, owningâs forced saving counts for more.
- Do you have reserves after closing? Owning without an emergency fund turns a broken water heater into credit card debt.
- Did you stress-test appreciation? Run it at 2% as well as 3.5%. If owning only wins in the optimistic case, itâs a lifestyle choice more than a financial one.
If owning wins under conservative assumptions, itâs a strong financial case. If it only wins under optimistic ones, the decision rests on how much you value stability and control.
Where to go next
- For a country-by-country version with local taxes and closing costs, use the United States rent vs buy calculator or browse all countries.
- To see why the monthly payment comparison misleads, try the rent vs mortgage calculator.
- For the full list of costs owners pay and renters donât, see hidden costs of owning a home.
- For the qualitative side of the decision, read owning a home vs renting.
- For the formulas behind every number on this page, see our methodology.
The calculator is an educational model, not financial advice. Get a mortgage quote and tax advice for your own situation before committing.
Frequently asked questions
What does a rent vs own calculator actually compare?
It compares your net worth in two versions of the same life. In one you buy, pay the mortgage and ownership costs, and keep the home's equity after selling costs. In the other you rent and invest the cash you would have spent on a down payment, plus any monthly savings. The option with the higher net worth at your chosen horizon wins.
Why does the calculator say renting wins when my rent equals my mortgage?
A mortgage payment is only part of what owning costs. Property tax, insurance and maintenance add about $925 a month to a $420,000 US home. Buying and selling costs also take around 9% of the price over the life of the deal. And the down payment stops earning investment returns. Matching rent to the mortgage payment leaves all of that out.
How long do I need to own for owning to beat renting?
It depends on your inputs. With our US defaults, owning does not catch up within 30 years. With a $350,000 home at the same $2,100 rent, it pulls ahead in year 6. Cheaper homes relative to rent, faster appreciation and lower rates all bring the break-even year closer. Check the break-even year in your results.
Does the rent vs own calculator include the mortgage interest deduction?
No. Tax deductions are not modelled. In the US, mortgage interest only lowers your taxes if you itemize, and many households take the standard deduction. If you do itemize, owning will look a little better than the calculator shows. You can roughly allow for this by lowering the mortgage rate input slightly.
Is home ownership vs renting a fair comparison if the renter never invests?
No. The calculator assumes the renter invests every dollar not spent on housing. If you would spend that money instead, owning's built-in forced saving is worth more than the results suggest. Our rent and invest vs buy calculator page shows how much the outcome changes when that discipline slips.
Can I use this calculator outside the United States?
Yes. The defaults are US figures, but every input can be edited. You can also load presets for other countries from the country pages, which set local taxes, transaction costs and typical rates.