Compare the total cost of renting against buying a home over the years you plan to stay, and find the breakeven year when buying becomes the cheaper choice.
Advanced: currency symbol
The renting line climbs steadily. The buying line starts high because of the down payment, then bends down as you build equity and the home gains value. Where the blue line drops below the red one, buying becomes the cheaper choice.
| End of year | Cost of renting | Net cost of buying | Cheaper option |
|---|
Net cost of buying is the mortgage payments and ownership costs paid so far, minus the equity built in the loan and minus the home's gain in value. A negative figure means the home has, on paper, more than paid for itself.
For beginners: how to read this result
Describe the task to the AI assistant and continue from the result.
Open AI assistant →To get a result, choose one of the preset scenarios or enter your own figures. The renting side needs your current monthly rent and the rate you expect rent to rise each year. The buying side needs the home price, the down payment, the mortgage rate and term, the annual ownership costs and the expected appreciation. Finally, set the comparison horizon: how many years you expect to stay.
What the headline answers
The headline gives a plain verdict for your horizon and, where the cost lines cross, the breakeven year: the year in which buying overtakes renting and becomes cheaper. If buying never catches up within the horizon, the result says so and tells you in which later year it would break even. If the lines never cross at all, that is stated too.
How the cost of renting is worked out
The cost of renting is simply the rent paid over the horizon. The monthly rent is multiplied by twelve for the first year, then increased by the annual rent increase percentage for each following year, and the yearly amounts are added up.
How the net cost of buying is worked out
The net cost of buying is everything you pay out, minus everything you get back. Money paid out is the down payment, the mortgage payments and the annual ownership costs (property tax, maintenance and insurance combined as one percentage of the home value). Money you get back is your equity, which is the down payment plus the loan principal repaid so far, and the home’s gain in value from appreciation. Net cost equals down payment plus mortgage paid plus ownership costs, minus equity, minus the gain in value. Because equity and appreciation build up over time, the net cost of buying falls year by year and can even turn negative.
Reading the chart and table
The line chart plots cumulative cost for both options. The renting line climbs steadily; the buying line starts high because of the down payment, then bends down. The point where the buying line drops below the renting line is the marked breakeven point. The year-by-year table lists both costs and the cheaper option for every year so you can read the breakeven year as an exact figure.
The down payment toggle
The down payment can be entered either as a percentage of the home price or as a fixed cash amount. Switching the toggle shows only the relevant input and hides the other, so the two are never visible at once.
What is not included
This is an estimate. It excludes closing costs, agent and moving fees, the costs and capital-gains tax of eventually selling, mortgage insurance for small down payments, HOA dues, any tax relief on mortgage interest or property tax, inflation adjustment, and the investment return you might earn on the down payment if it were not spent. It assumes constant rates throughout. Real costs vary, so use the result as a planning guide rather than financial advice.