Should you buy a home or rent and invest the difference?
Drag the sliders. The answer updates instantly — and every formula is documented.
An honest calculator, not a sales tool
Most rent-vs-buy tools are built by companies with a stake in your answer — lenders, brokerages, listing sites — and most of them quietly skip the hard parts. The famous exception sits behind a newspaper paywall. This one is free, unaffiliated, and counts everything:
- Symmetric opportunity cost. The renter invests the down payment and every month's savings — and when owning becomes the cheaper path, the buyer's surplus gets invested too. Most calculators only credit one side.
- The full cost of owning. Mortgage interest, property tax (with annual growth), insurance, maintenance, HOA, PMI until it auto-cancels, ~3% closing costs going in, and ~6% selling costs coming out.
- Real tax rules. Itemizing only helps beyond the standard deduction — which is why, since 2018, mortgage tax breaks are worth far less than most people think. We model the $750k interest cap, the SALT cap, capital-gains tax, and the home-sale exclusion.
- Honesty about uncertainty. Every verdict ships with a sensitivity table showing whether a one-point change in your assumptions flips the answer.
The full model — every formula, every default, every simplification — is public on the methodology page, and the engine is open source with 91 automated tests. If you find an error, tell us and we'll fix it.
The 2026 picture: rates decide the answer
According to our model, as of July 2026, with 30-year mortgages near 6.5%, buying a typical US home beats renting only when a comparable rental costs more than about 0.7% of the home's value per month ($2,468/mo on a $420,000 home over a 10-year stay). Most US rentals sit closer to 0.5–0.6% — which is why renting-and-investing currently wins in most markets.
Here's how that buy/rent tipping point moves with mortgage rates:
| Mortgage rate | Tipping-point rent ($420k home) | As % of home value/mo |
|---|---|---|
| 4% | $1,890 | 0.54% |
| 5% | $2,067 | 0.59% |
| 6% | $2,340 | 0.67% |
| 6.5% | $2,468 | 0.71% |
| 7% | $2,590 | 0.74% |
| 8% | $2,830 | 0.81% |
Assumptions: 20% down, 3% home appreciation, 2.5% rent growth, 7% investment return, 10-year stay, standard deduction. Change any of them — the calculator recomputes your tipping point live.
Quick answers
Is it cheaper to rent or buy in 2026?
At mid-2026 mortgage rates (~6.5%), renting and investing the difference wins in most US markets at typical rent levels. In our national-typical scenario — a $420,000 home versus $2,100 rent with a 10-year stay — renting comes out about $67,000 ahead. Buying wins where rent is high relative to price, stays are long, or rates drop: the same scenario at a 4% mortgage flips to buying by $38,000.
How does this calculator decide which side wins?
It simulates both paths month by month for your whole stay: the buyer pays the mortgage, taxes, insurance, maintenance, and PMI and builds equity; the renter pays rent and invests the down payment plus every month’s cost difference. Whichever side is cheaper in a given month invests the surplus — both directions. At the end, both sides "cash out" (selling costs and taxes included) and we compare net worth.
What rent makes buying the better deal?
We compute a tipping-point rent for your exact inputs. In the default 2026 scenario it’s about $2,468/month on a $420,000 home — roughly 0.7% of the home’s value per month at 6.5% mortgage rates. If similar homes rent for more than that, buying wins; for less, renting wins. At 4% rates the tipping point drops to about 0.54% of home value.
Does it account for taxes?
Yes — with current US rules: the standard deduction versus itemizing (mortgage interest capped at $750,000 of loan, property tax capped by the $40,400 SALT limit), capital-gains tax on the investment portfolio, and the Section 121 home-sale exclusion ($250k single / $500k married). Outside the US, set the tax fields to zero and use it as a pre-tax comparison in any currency.
Why do most calculators favor buying?
Three common shortcuts: they compare a mortgage payment to rent while ignoring taxes, maintenance, and selling costs; they don’t invest the renter’s down payment; and they never credit the buyer’s surplus when renting is dearer, or the renter’s when owning is dearer. We model the opportunity cost symmetrically and document every formula on the methodology page.
Is this financial advice?
No. It’s an educational model driven entirely by your assumptions — small changes can flip the answer, which is why we show a sensitivity table with every result. Use it to understand the trade-off, then talk to a professional who knows your situation.
More detail: 20 questions answered with numbers, or the deep-dive guides on the 2026 math and break-even years.