Rent vs Buy
Find the "Breakeven" Point for Your Next Move
Current Renting Scenario
Potential Purchase
Sunk Rent Costs
Total rent paid over 7 years with zero equity gain.
Sunk Buy Costs
Net cost after P&I, taxes, and fees, minus home equity gain.
Beyond the Monthly Payment
Choosing between renting vs buying isn't just about comparing rent to a mortgage payment. It’s a complex calculation of asset appreciation, opportunity cost, and tax efficiency.
Asset Appreciation
Buying a home is essentially a leveraged investment. When home prices rise, you gain equity on the full value of the house, not just your initial down payment. Over a 7-10 year horizon, this typically outweighs rental flexibility.
Opportunity Cost
The money you put into a down payment could potentially earn 7-10% in the stock market. Renting allows you to keep that capital liquid, which in high-interest rate environments might yield better long-term returns for some portfolios.
The "Sunk Cost" Checklist
Expenses you never get back, regardless of which path you choose.
Buying Sunk Costs
- Mortgage Interest: Significant in the first 10 years.
- Property Taxes & Insurance: Perpetual expenses.
- Maintenance (1% Rule): Annual upkeep costs.
- Closing Costs: 2-5% when buying and 6% when selling.
Renting Sunk Costs
- 100% of Rent: Every dollar paid is a sunk cost.
- Rental Insurance: Necessary but adds up.
- Inflation Risk: No protection against rising local rates.
- No Tax Deductions: Missed mortgage interest tax benefits.
Ready to make your move?
Housing is personal. While this tool models the math, your lifestyle, career mobility, and local market trends are the final deciding factors.