Mortgage vs Rent: How to Actually Decide
Skip the rules of thumb. Here is the framework — timeline, true costs, and flexibility — that determines whether renting or buying wins for you.
Read articleRent vs Buy Calculator
The honest answer depends on one number most comparisons ignore: how long you'll stay.
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6.5%
7 years
Recommendation
Renting
Estimated Savings$30,847
Renting for 7 yrs$202,289
Buying, net cost$233,136
Simplified model assuming 20% down, a 30-year loan, 3% closing costs, 2% of the home price per year for taxes/insurance/maintenance, 3% annual rent increases, and credit for loan principal repaid. Home price appreciation is not modeled.
Why your timeline decides the answer
Buying front-loads thousands in one-time costs — closing fees, moving, and eventually selling costs. Those expenses spread across every year you stay, which is why buying usually loses on a 2-year horizon and usually wins on a 10-year one. Most markets break even somewhere between 3 and 7 years. Drag the years slider and watch the recommendation flip — that flip point is your personal breakeven.
What the model counts
The buying side includes mortgage payments at 20% down, 3% closing costs, and 2% of the home price per year for taxes, insurance, and maintenance — minus the loan principal you repay, since that's equity you keep. The renting side grows your rent 3% annually. It deliberately doesn't predict home-price appreciation, which is a bet, not a budget. Check the payment itself with the Mortgage Calculator and confirm the price range fits with the Affordability Calculator.
Frequently asked questions
Why does the number of years I plan to stay matter so much?
Buying has large one-time costs (closing costs, moving, selling fees) that spread out over your years in the home. The longer you stay, the more buying tends to win. Most markets have a breakeven point between 3 and 7 years.
What costs does this comparison include?
It compares total rent paid against the cost of owning, including mortgage payments and estimated purchase costs. It is a simplified model — it does not predict home price appreciation or rent increases.
If buying is cheaper, should I always buy?
Not necessarily. Renting buys flexibility, no maintenance responsibility, and no market risk. The right answer depends on job stability, lifestyle, and local prices, not just the math.
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