Rent vs. Buy Calculator

The main purpose is to help you determine the financial superiority between renting and buying a home over a specific time period. It identifies the breakeven point—the year when owning a home is projected to cost the same as, or less than, renting, guiding you toward the decision that builds the most long-term wealth.

Opportunity Cost is the potential return you sacrifice by locking your money into a down payment and closing costs instead of investing it (e.g., in stocks or bonds). The calculator is crucial because it accounts for the growth you miss out on from those initial funds, ensuring the buying option isn't unfairly penalized for a major upfront expense.

The required duration varies for every individual, but the calculator specifically reveals the financial break-even point (often between 3 and 7 years). If you plan to sell before this point, the high upfront costs (like closing costs) usually make renting more financially sound. If you stay longer, buying becomes more advantageous.

The most influential variables are the annual home appreciation rate, the rate of return you could earn on your investments (opportunity cost), and the estimated time period you plan to stay in the home. Small changes to these three inputs can drastically shift the breakeven point and the final net wealth projection.