Rent vs Buy Calculator: Should You Rent or Buy a Home? (2026)
By Wealthvieu · Updated
Use these tables to compare the true cost of renting versus buying across different scenarios, cities, and time horizons.
Table of Contents
The 5% Rule Quick Reference
Multiply home value by 5% ÷ 12 to find your breakeven monthly rent.
Home Price
Annual Ownership Cost (5%)
Monthly Breakeven Rent
$200,000
$10,000
$833
$300,000
$15,000
$1,250
$400,000
$20,000
$1,667
$500,000
$25,000
$2,083
$600,000
$30,000
$2,500
$750,000
$37,500
$3,125
$1,000,000
$50,000
$4,167
If you can rent a comparable home for less than the breakeven rent, renting is cheaper. The 5% accounts for property taxes (~1%), maintenance (~1%), and opportunity cost of equity (~3%).
True Monthly Cost of Owning vs Renting
$350,000 Home Purchase Scenario
Cost Category
Buying (Monthly)
Renting Equivalent (Monthly)
Mortgage payment (P&I)
$1,753
—
Property taxes
$365
Included in rent
Home insurance
$150
$15 (renters insurance)
PMI (if applicable)
$0-$175
—
Maintenance/repairs
$292
$0
HOA fees
$0-$350
$0
Opportunity cost of down payment
$233
—
Rent payment
—
$1,900
Total monthly cost
$2,793-$3,318
$1,915
Assumes 20% down ($70,000), 6.5% rate, 30-year term. Opportunity cost assumes 4% return on down payment.
But Buying Builds Equity
Year
Total Paid (Buying)
Total Paid (Renting)
Home Equity Built
Net Cost Difference
1
$33,516
$22,980
$8,120
Renting wins by $2,416
3
$100,548
$70,326
$25,530
Renting wins by $4,692
5
$167,580
$119,154
$44,380
Buying wins by $3,954
7
$234,612
$169,563
$64,870
Buying wins by $14,821
10
$335,160
$247,284
$97,690
Buying wins by $9,814
15
$502,740
$389,718
$166,030
Buying wins by $53,008
Assumes 3% annual home appreciation and 3.5% annual rent increases.
Breakeven Timeline by City
Years Until Buying Beats Renting (2026)
City
Median Home Price
Median Rent
Price-to-Rent Ratio
Breakeven (Years)
Detroit, MI
$235,000
$1,100
17.8
2-3 years
Cleveland, OH
$220,000
$1,050
17.5
2-3 years
Indianapolis, IN
$270,000
$1,250
18.0
3-4 years
Dallas, TX
$380,000
$1,650
19.2
4-5 years
Atlanta, GA
$395,000
$1,700
19.4
4-5 years
Denver, CO
$550,000
$1,950
23.5
5-7 years
Nashville, TN
$430,000
$1,720
20.8
5-6 years
Seattle, WA
$775,000
$2,400
26.9
7-9 years
Austin, TX
$520,000
$1,750
24.8
6-8 years
Miami, FL
$590,000
$2,200
22.4
6-8 years
Los Angeles, CA
$920,000
$2,800
27.4
8-11 years
Boston, MA
$780,000
$2,900
22.4
7-9 years
New York, NY
$680,000
$3,400
16.7
9-12 years
San Francisco, CA
$1,350,000
$3,500
32.1
12-15+ years
San Jose, CA
$1,450,000
$3,200
37.8
15+ years
Price-to-rent ratio = Home price ÷ Annual rent. Lower is better for buying.
Price-to-Rent Ratio Guide
Price-to-Rent Ratio
Verdict
Example Markets
Under 15
Strong buy — Buying is clearly cheaper
Few major metros qualify
15-20
Favors buying — Buy if staying 3+ years
Detroit, Cleveland, Indianapolis, Pittsburgh
20-25
Toss-up — Buy if staying 5+ years
Dallas, Atlanta, Nashville, Phoenix
25-30
Favors renting — Buy only if staying 7+ years
Denver, Seattle, Austin
Over 30
Strong rent — Renting is almost certainly cheaper
San Francisco, San Jose, Honolulu
Impact of Down Payment Size
$400,000 Home at 6.5% Interest Rate
Down Payment
Monthly Payment
PMI Cost
Total Monthly Housing
5-Year Total Cost
3% ($12,000)
$2,455
$194
$3,206
$192,360
5% ($20,000)
$2,405
$169
$3,131
$187,860
10% ($40,000)
$2,279
$131
$2,967
$178,020
15% ($60,000)
$2,153
$0
$2,710
$162,600
20% ($80,000)
$2,026
$0
$2,583
$154,980
Lower down payment = higher monthly cost + PMI, but less capital locked up.
Renting and Investing the Difference
What if you rent and invest the money you would have spent on a down payment + the monthly cost difference?
$80,000 Down Payment Invested + Monthly Savings
Scenario
5 Years
10 Years
15 Years
20 Years
Invested at 7% return
$156,480
$261,870
$411,700
$628,850
Home equity (3% appreciation)
$44,380
$97,690
$166,030
$254,320
Renter advantage
$112,100
$164,180
$245,670
$374,530
This assumes rent stays cheaper than buying costs by $400/month and that difference is also invested. In practice, rent increases may erode this advantage over longer periods.
Reality Check: Why Most People Shouldn’t Invest the Difference
Factor
Theory
Reality
Invest down payment
$80K into index funds
Most spend it on rent, lifestyle
Invest monthly savings
$400/mo into brokerage
Only ~10% of renters actually do this
Stay disciplined 20 years
Never touch the money
Life events cause withdrawals
Risk tolerance
Hold through crashes
Many sell during 30-40% drops
Hidden Costs Comparison
Costs Most People Forget
Hidden Cost
Buying
Renting
Closing costs (purchase)
$8,000-$16,000
$0
Closing costs (sale)
$24,000-$36,000 (6% of price)
$0
Moving costs
$2,000-$10,000
$500-$3,000
Maintenance/repairs
$3,500-$7,000/year
$0
Opportunity cost of equity
$2,800-$5,600/year
$0
Renovation/updates
$5,000-$30,000 over 10 years
$0
Rent increases
N/A
3-5% per year average
Building equity
Yes (forced savings)
No
Tax benefits
Mortgage interest deduction
None (standard deduction may be higher)
Mobility/flexibility
Low (selling takes months)
High (move with 30-60 days notice)
When Renting Is the Better Choice
Situation
Why Rent
Staying less than 3-5 years
Transaction costs eat into any equity gains
High price-to-rent market (>25)
Monthly ownership costs far exceed rent
Unstable income or job
Need flexibility to relocate for opportunities
Large debts to pay off first
Debt-free before taking on a mortgage
Down payment under 10%
PMI + high payments make ownership expensive
Career building phase (20s-early 30s)
Maximize income growth through mobility
When Buying Is the Better Choice
Situation
Why Buy
Staying 5+ years in one location
Time to recoup transaction costs and build equity
Affordable market (price-to-rent < 20)
Monthly costs comparable to or less than renting
Stable career and income
Can confidently commit to a mortgage
20% down payment saved
Avoid PMI, lower monthly costs
Want to lock in housing costs
Fixed mortgage payment vs unpredictable rent increases
