Buying vs. Renting: A 20-Year Cost Breakdown
Buying a home involves upfront costs (closing costs ~3%, down payment) and ongoing costs (mortgage interest, property tax ~1.2%/yr, maintenance ~1%/yr). Renting avoids these but means paying rent — and that money doesn't build equity. The break-even point typically falls between 5–10 years in most US markets.
This calculator excludes home price appreciation deliberately — that variable is location-specific and hard to predict. It focuses purely on out-of-pocket costs so you can make a fair comparison. Add expected appreciation separately if you have a local estimate.
Frequently Asked Questions
Mortgage payments build equity, so the money isn't entirely "lost" — it contributes to ownership. Over 20 years, you own the asset outright (assuming a 20-year mortgage). Renters have nothing to show after 20 years of payments.
No maintenance costs, property taxes, or capital tied up in a down payment. In high-price markets, investing the down payment elsewhere at 6–8% return can beat home appreciation in some scenarios.
Rents historically increase ~3% per year. If you rent for 20 years, your rent in year 20 could be 80% higher than today. A fixed-rate mortgage locks in your largest monthly cost, providing stability renters don't have.