Buying isn't automatically better than renting. Compare the multi-year net cost of each — after equity on one side and investment growth on the other — and see your break-even year. Results update as you type.
Investment return is the opportunity cost: what a renter could earn investing the cash a buyer ties up upfront.
Net cost of buying is everything you pay to own over the period — upfront cash, mortgage, taxes, insurance, maintenance — minus the equity you'd walk away with if you sold (after appreciation and selling costs). Net cost of renting is the rent you'd pay over the same years, minus the investment growth on the cash a buyer ties up. Lower wins.
Owning is more than the mortgage payment: principal & interest, property tax, homeowners insurance, PMI (under 20% down), and maintenance (often ~1% of value per year), plus the down payment and roughly 3% in closing costs. Some of each payment builds equity, and fixed-rate principal & interest doesn't rise with inflation.
Because buying carries large upfront and selling costs, it usually takes several years for ownership to come out ahead — frequently 5+ years, though your break-even above depends on your inputs. Short stays favor renting; longer stays favor buying. Several of our city pages also show a typical local rent next to the estimated cost of buying.
It models each year you own: your mortgage, taxes, insurance, and maintenance, minus the equity you'd keep if you sold (after selling costs and appreciation). It compares that to renting over the same period, crediting the renter with the investment growth on the cash a buyer would tie up upfront. The break-even year is when buying's net cost first drops below renting's.
The number of years you'd need to stay for buying to become cheaper than renting on your assumptions. Because buying has large upfront and selling costs, short stays usually favor renting; longer stays usually favor buying.
No. It's an estimate to frame the trade-off. It can't capture everything — job flexibility, the risk and effort of ownership, tax situations, or how markets actually move. Treat it as a starting point, not an answer.
The cash you put down (and closing costs) is money a renter could invest instead. This calculator credits the renter with that investment growth, which is why a higher assumed investment return makes renting look better.