Enter your numbers for both scenarios to see the true cost over your timeframe — accounting for equity, appreciation, selling costs, and what you'd earn investing the down payment instead.
The default scenario: a $400,000 home, $80,000 down (20%), a 6.5% 30-year mortgage, 1.1% property tax, $1,400/year insurance, 1% maintenance, $2,000/month rent rising 3% a year, money growing at 6% if invested instead, over a 7-year horizon.
The mortgage alone — worked in full on the Mortgage Calculator — comes to $2,023/month in principal and interest; add tax, insurance, and maintenance and the full monthly cost of owning is $2,839, against a rent that starts at $2,000 but keeps climbing. Run that forward 7 years: the home is worth an estimated $491,950, the remaining loan balance is $289,332, and selling would cost about $34,436 in fees — leaving $168,181 in equity against $330,500 paid in over the period, a net cost of $162,319. Renting the same 7 years costs $183,899 in cumulative rent, but the $92,000 that would otherwise go to a down payment and closing costs instead grows to $138,334 if invested at 6%, a $46,334 gain — a net cost of $137,565. On these exact numbers, renting comes out about $24,754 cheaper over 7 years, and buying does not catch up until year 11, not year 7.
Raise nothing but the assumed investment return, from 6% to 8%, and the gap nearly doubles — renting's advantage grows to about $44,092 and the break-even year stretches to 17. None of the other numbers changed; only what the money not spent on a house is assumed to earn, which is exactly the number the Investment Calculator can help sanity-check against realistic long-run returns. That sensitivity is the honest answer to "which is better" — it depends less on home prices than on an assumption most people never write down, so it is worth testing a range of values here rather than trusting a single run. Working backward from what monthly payment is actually affordable first, via the House Affordability Calculator, is a reasonable way to bound the home-price side before running this comparison at all.
Total cash paid — down payment, closing costs, and monthly mortgage principal & interest, property tax, insurance, and maintenance over your chosen years — minus the equity you'd recover by selling at the end of that period (home value at that point, minus your remaining loan balance, minus selling costs).
Total rent paid over the same period (growing each year at your assumed rent increase), minus the investment gain you'd get from investing the down payment and closing costs instead of spending them on a home purchase — money a renter keeps that a buyer ties up in the house.
The first year at which buying's net cost drops to or below renting's net cost. If you plan to stay longer than this, buying tends to win financially; shorter than this, renting tends to win — mainly because closing and selling costs are large fixed costs that only get "worth it" the longer you stay.
No — this covers the major, quantifiable costs on both sides, but skips harder-to-model factors like renovation costs, moving costs, or the value of stability vs. flexibility, which are real but not purely financial. Treat the break-even year as a strong directional signal, not a precise line.
A note for renters in India. The comparison above understates renting if you claim House Rent Allowance, because part of the rent is effectively paid out of untaxed income while a home loan gets its own separate deductions. Work out your exempt amount with the HRA exemption calculator and treat the tax saved as a reduction in the true cost of renting before reading the verdict above.
Already have a mortgage and considering a new rate instead? Use the Refinance Calculator. See where mortgage rates stand in 2026 before deciding. Before comparing against buying, sanity-check the rent itself with the Rent Affordability Calculator. The same ground is covered chapter by chapter in our book, From Paycheck to Portfolio. The buy side improves sharply for eligible veterans, since a VA loan needs no deposit at all; rerun it with the VA mortgage calculator.