How long do I need to stay for buying to be worth it?

Long enough to recover the transaction costs, which run to roughly 10% of the price across both ends. That usually means several years at minimum, and longer when appreciation is modest or the rate is high. Enter a shorter horizon here and the calculator will tell you plainly that buying does not recover its costs.

Is renting really throwing money away?

No more than mortgage interest, property tax, insurance, maintenance and agent commission are, all of which are equally unrecoverable. The breakdown above totals those so you can compare them with rent directly. What buying adds is the principal repaid and any appreciation, and both take time to outweigh what it cost to get in.

What house appreciation rate should I assume?

Something close to inflation is the defensible default; long-run US house prices have tracked near it. Appreciation is the input that most changes the answer, so run the calculator at a conservative figure and at zero. If buying only wins on an optimistic rate, you are betting on the rate rather than on the house.

Does this include maintenance?

Yes, at 1% of the home’s value a year by default, and it is adjustable. This is the cost most rent-versus-buy comparisons leave out, and leaving it out moves the breakeven forward by years. It is a rule of thumb rather than a budget, older properties routinely spend more.

How much house could I actually afford?

A separate question, answered by the debt-to-income limit a lender applies rather than by this comparison. The home affordability calculator works that out, and the mortgage calculator gives the full monthly payment with escrow once you have a price in mind.

Should I take a 15-year or 30-year mortgage if I buy?

This model assumes a 30-year loan. Whether the shorter term is better depends on what its much larger payment could otherwise earn, the 15-year against the 30-year solves for the return that decides it.

Is It Cheaper to Rent or Buy a House?

Is it cheaper to rent or buy a house? It depends almost entirely on how long you stay. Buying starts far behind, because the deposit, closing costs and early interest all land immediately, then catches up as equity builds. The useful answer is the month it overtakes, rather than a verdict.

Example numbers

The verdictfrom an example

Buying overtakes renting after 8 years, 9 months. Stay 10 years and you end $10,529 ahead.

Worked on $450,000 home with 20% down at 6.50%, against $2,400 rent. Change anything below to use yours.

Buying pays off after: 8 years, 9 months
Net worth after 10 years, buying: $288,382
Net worth, renting: $277,854

The figures behind it

Buying pays off after: 8 years, 9 months; Stay past this and buying is ahead; leave earlier and renting was cheaper.
Net worth after 10 years, buying: $288,382; Sale proceeds of $593,577, less the mortgage, plus anything invested.
Net worth, renting: $277,854; The deposit and closing costs invested, plus any monthly saving.
Buying ends ahead by: $10,529; On the same monthly outlay throughout.
Cash needed to buy: $103,500; Deposit plus closing costs, money the renter keeps invested.
First month: buy vs. rent: $3,250 vs $2,420; Whichever is cheaper invests the difference, every month.

Money buying never gets back$416,272

52%

48%

Mortgage interest$218,248
Tax, insurance, upkeep and feesIncluding both ends of the transaction.$198,025

Net worth on both paths

Years from today

BuyRent and invest the difference

Payment scheduleShow

The table scrolls sideways

Year	Buy · monthly	Rent · monthly	Home value	Mortgage	Buy · net worth	Rent · net worth
1	$3,282	$2,487	$466,005	$355,976	$77,409	$119,141
2	$3,318	$2,562	$482,580	$351,683	$97,116	$135,159
3	$3,355	$2,639	$499,743	$347,102	$117,659	$151,560
4	$3,393	$2,719	$517,518	$342,215	$139,077	$168,354
5	$3,433	$2,801	$535,924	$337,000	$161,410	$185,549
6	$3,474	$2,886	$554,986	$331,436	$184,701	$203,155
7	$3,517	$2,973	$574,725	$325,499	$208,995	$221,179
8	$3,561	$3,062	$595,166	$319,165	$234,340	$239,630
9	$3,607	$3,155	$616,334	$312,406	$260,785	$258,519
10	$3,654	$3,250	$638,255	$305,195	$288,382	$277,854

What this result assumes

Both paths spend the same amount every month. Whichever is cheaper in a given month invests the difference, and the renter also invests the deposit and closing costs from day one, money the buyer has handed over.
The buyer is assumed to sell at the horizon, so selling costs are deducted from the home’s value. If you would stay indefinitely those costs are deferred rather than avoided, and buying looks better by roughly that amount.
Appreciation is the assumption doing the most work in this model, and it is the least knowable. Long-run US house prices have tracked close to inflation; a rate well above that will make buying win almost regardless of everything else, so it is worth testing a conservative figure.
Maintenance at 1% of value a year is a rule of thumb, not a budget. Older homes routinely exceed it, and it is the cost people most often leave out entirely.
The mortgage interest and property tax deductions are not applied, which understates buying for filers who itemize. Most take the standard deduction and get no benefit.
Nothing here prices what a home is for. Security of tenure, freedom to alter the place, the cost of moving, and being tied to one city are all real and none of them are dollars.

Methodology

Reviewed September 1, 2026

"Rent is dead money" is not an argument

Buying has dead money in it too, and in the early years there is a great deal of it. Mortgage interest, property tax, insurance, maintenance and both ends of the transaction are gone the moment they are spent — they build no equity and come back to you never. On the default figures, the first mortgage payment is around 85% interest.

The breakdown above totals those costs so they can be compared with rent directly. That is the honest version of the comparison: not rent against the whole mortgage payment, but rent against the part of ownership that is equally unrecoverable.

What ownership adds on top is the principal you repay and whatever the home appreciates. Those are real, and they are also slow — which is why the answer is a date rather than a verdict.

Holding the budget equal

Both paths spend the same amount every month. Whichever is cheaper invests the difference at your expected return, taxed as a brokerage account would be. Crucially, the renter also invests the deposit and the closing costs on day one — money the buyer has handed over and cannot invest.

That opening gap is why buying starts so far behind, and it is the part most comparisons omit. A renter with $103,500 invested and a buyer with $103,500 of equity in a house that has just cost 3% to acquire are not in the same position, and pretending otherwise settles the question before it is asked.

At the horizon the buyer sells: net worth is the home’s value less selling costs and the remaining mortgage, plus anything invested alongside. The renter’s is simply their portfolio. The breakeven reported is the first month buying takes the lead and does not give it back.

The assumption doing the heavy lifting

Appreciation. It is the single input that most changes the answer and the one nobody can know. Set it to zero and buying takes far longer to win; set it to 6% and buying wins almost regardless of everything else, because the gains apply to the whole house rather than to your equity in it.

Long-run US house prices have tracked reasonably close to inflation, which makes anything much above 3–4% an aggressive assumption rather than a neutral one. It is worth running the calculator twice — once at a rate you would defend and once at zero — and seeing whether the decision survives.

Maintenance is the second omission. At 1% of value a year it is a rule of thumb, not a budget, and older properties routinely exceed it. It is also the cost people most often leave out of a rent-versus-buy comparison entirely, which quietly moves the breakeven forward by years.

Neither of those, nor anything else here, prices what a home is actually for. Security of tenure, the freedom to change the place, the cost and disruption of moving, and being tied to one city are all real considerations, and none of them are dollars.

Assumptions

Both paths spend the same amount each month; the cheaper one invests the difference.
The renter invests the deposit and closing costs from day one.
The buyer sells at the horizon and pays selling costs out of the proceeds.
Home appreciation and rent growth are constant annual rates.
Property tax, insurance and maintenance are constant shares of the home’s current value.
Investment gains are taxed annually at your marginal rate, as a taxable account would be.
The mortgage is a 30-year fixed loan; mortgage insurance below 20% down is not modelled.
The mortgage interest and property tax deductions are not applied.
No moving costs, rent deposits, vacancy or landlord rent rises beyond the growth rate are modelled.
Non-financial considerations — security of tenure, flexibility, control — are outside the model entirely.

Sources

Common questions

Is it cheaper to rent or buy a house?: It depends on how long you stay, more than on any other input. Buying starts far behind because the deposit, closing costs and early interest all land immediately, then catches up as equity builds and the home appreciates. On the default figures buying overtakes renting after several years, the calculator gives the exact month for your numbers.
How long do I need to stay for buying to be worth it?: Long enough to recover the transaction costs, which run to roughly 10% of the price across both ends. That usually means several years at minimum, and longer when appreciation is modest or the rate is high. Enter a shorter horizon here and the calculator will tell you plainly that buying does not recover its costs.
Is renting really throwing money away?: No more than mortgage interest, property tax, insurance, maintenance and agent commission are, all of which are equally unrecoverable. The breakdown above totals those so you can compare them with rent directly. What buying adds is the principal repaid and any appreciation, and both take time to outweigh what it cost to get in.
What house appreciation rate should I assume?: Something close to inflation is the defensible default; long-run US house prices have tracked near it. Appreciation is the input that most changes the answer, so run the calculator at a conservative figure and at zero. If buying only wins on an optimistic rate, you are betting on the rate rather than on the house.
Does this include maintenance?: Yes, at 1% of the home’s value a year by default, and it is adjustable. This is the cost most rent-versus-buy comparisons leave out, and leaving it out moves the breakeven forward by years. It is a rule of thumb rather than a budget, older properties routinely spend more.
How much house could I actually afford?: A separate question, answered by the debt-to-income limit a lender applies rather than by this comparison. The home affordability calculator works that out, and the mortgage calculator gives the full monthly payment with escrow once you have a price in mind.
Should I take a 15-year or 30-year mortgage if I buy?: This model assumes a 30-year loan. Whether the shorter term is better depends on what its much larger payment could otherwise earn, the 15-year against the 30-year solves for the return that decides it.

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