Is it better to rent or buy? The rent vs buy calculator compares the two paths by net worth. Both start with the same cash. The buyer spends it on a down payment and closing costs, and the renter invests it. Each month, whichever path costs less invests the difference at the same return.
Its example is a $400,000 home with $80,000 down at 7.4%, Freddie Mac's average 30-year rate for the week of October 15, 2026. The other path is renting a similar home for $2,000 a month. After 10 years, buying leaves $283,520 once the home is sold. Renting and investing leaves $366,951, or $83,431 more.
The first month
Owning costs $3,016 a month at first: $2,216 for principal and interest, $300 for property tax, $167 for insurance and $333 for maintenance. Renting costs $2,014, including $14 of renter's insurance. So the renter invests $1,002 a month. That is on top of the $92,000 a buyer would spend up front on the down payment and 3% closing costs.
Much of the owner's payment does not build equity either. In the first month, $1,973 of the $2,216 mortgage payment is interest. With tax, insurance and maintenance, $2,773 a month buys no part of the home, and only $242 goes toward owning it.
What moves the answer most
The investment return matters most, because the renter's savings compound for as long as you stay. In this example, buying wins over 10 years only if those savings would earn less than 4.9% a year. At a bond-like 4.5%, buying comes out $8,251 ahead. Buying also wins if a similar home would rent for more than $2,401 a month.
The price-to-rent ratio comes next. It is the price divided by a year's rent: 16.7 for this home. Nationally, the median existing home sold for $417,500 in September 2026 and typical rent was $1,932 a month, a ratio of about 18. A home that is cheap for its rent pays off sooner. For the same $400,000 home at 7.4%, here is the first year buying beats renting:
| Price-to-rent | Monthly rent | Savings earn 4.5% | Savings earn 8.3% |
|---|---|---|---|
| 12 | $2,778 | Year 4 | Year 5 |
| 14 | $2,381 | Year 5 | Year 11 |
| 16 | $2,083 | Year 8 | None in 30 years |
| 18 | $1,852 | Year 13 | None in 30 years |
| 20 | $1,667 | Year 21 | None in 30 years |
The mortgage rate matters too. At 6% instead of 7.4%, the example home breaks even in year 6 with 4.5% returns, though still not within 30 years at 8.3%.
The last lever is how long you stay. In this example, about 11% of the price is lost to buying and selling: 3% to buy and 8% to sell. The home's growth and the loan payments have to make that up before buying pulls ahead.
Where the defaults come from
Every default is a published figure, and the page lists each source. Home prices rose 4.3% a year on the FHFA purchase-only index from January 1991 to July 2026. Rent in the consumer price index rose 3.3% a year from January 1991 to September 2026. Property tax is ATTOM's 0.9% national rate for 2025. Insurance is 0.5% of value, from Freddie Mac's 2023 figure of $4.90 per $1,000. Maintenance is 1%, the low end of the 1% to 3% range cited by Cooperative Extension. Buying costs are 3%, within Freddie Mac's 2% to 5% range. Selling costs are 8%, from Clever Real Estate's August 2026 commission survey and its seller cost data. The 8.3% return is a 60/40 mix of the S&P 500 and 10-year Treasury bonds from 1928 to 2025, from NYU Stern data.
What the calculator leaves out
Income taxes are left out on both sides. Only 9.5% of tax returns itemized deductions in 2022, according to the IRS. Most home sale gains are tax free, up to $250,000 of gain, or $500,000 on a joint return. A renter's investment gains can be taxed, which the calculator also skips. Falling prices hurt buyers fast, because the loan doesn't shrink with the price. The Case-Shiller national index fell 27.4% from July 2006 to February 2012. And buying brings things a spreadsheet can't price, the page notes, like stability or the freedom to renovate.
Use it on your own site
The rent vs buy calculator is free to embed on a blog or website with copy-and-paste code, with no ads or tracking. Here is how to embed it.
Source: Freddie Mac via FRED, week of October 15, 2026; National Association of Realtors and Zillow, September 2026; FHFA index via FRED, July 2026; BLS rent index via FRED, September 2026; NYU Stern, 1928 to 2025; Clever Real Estate, August 2026; IRS, tax year 2022. Figures are educational estimates, not financial advice.