Rent vs. Home Owner
Neither is automatically the "smarter" choice - it depends on how long you stay, your local market, and what you do with the money you don't spend.
Rent vs Buy Calculator
Compares your net worth after the years you stay. The buyer's side counts the home's value after selling costs; the renter's side assumes the money a buyer would have spent (the down payment, closing costs, and any monthly difference) gets invested instead.
Your timeline
Buying
Renting
The mortgage rate starts at the Freddie Mac Primary Mortgage Market Survey® 30-year fixed average (7.32% as of October 22, 2026). Ignores income taxes (mortgage interest deduction, capital gains on the renter's investments), assumes property tax and maintenance grow with the home's value, and treats rates as steady. A planning estimate, not a guarantee.
Net worth if you sold / moved out that year
First month's cost
Selling after 7 years
Money you don't get back
Costs over your stay that don't build equity. Principal payments aren't here - they come back to you as equity.
Effect of extra payments
What the Numbers Don't Show
The calculator handles the money. These are the tradeoffs behind it.
Buying builds equity - slowly at first
Part of every mortgage payment pays down the loan. Early on, though, most of the payment is interest: on a 30-year loan at 6.5%, only about 15% of the first year's payments go to principal. Equity builds faster in later years, which is a big reason buying tends to pay off only if you stay several years.
Renting has real financial upsides
No maintenance bills, no property taxes, no risk of your home's value dropping, and the flexibility to move without selling. The down payment you don't spend can be invested instead - but only if you actually invest it. Renting and spending the difference loses to buying almost every time.
Short stays favor renting
Buying costs 2-5% up front and selling costs another 6-10%. It takes years of appreciation and loan paydown to earn that back. Moving within a couple of years of buying is one of the most common ways owning ends up costing more than renting would have.
Owning is more than the mortgage
Property taxes, insurance, maintenance (around 1% of the home's value per year), HOA dues, and surprise repairs all come on top of principal and interest. A fair comparison includes all of them - which is exactly what the calculator above does.
Stability has value
A fixed-rate mortgage locks in your principal and interest for decades, while rent can rise every year. Owners also can't be asked to leave when a lease ends, and they can renovate as they like. Those are real benefits even when the math is close.
Extra payments are a guaranteed return
Every extra dollar toward principal "earns" your mortgage rate by avoiding future interest. At 6.5%, that's competitive with investing and risk-free. At 3%, investing the money has historically come out ahead. Build an emergency fund first, since money paid into a house is hard to get back out quickly.
Want the full monthly payment breakdown and amortization schedule? Use the mortgage calculator on the Real Estate page.