Why renting isn't "throwing money away"
The oldest line in real estate is that rent is wasted money. The honest math is more interesting. Buying carries costs that build no equity either — mortgage interest, property tax, insurance, maintenance, and closing costs — and the down payment you tie up in a house is cash that could otherwise be invested. This calculator counts all of it, including that opportunity cost, then finds the breakeven year: how long you must stay for buying to beat renting.
The shorter your time horizon, the more renting wins, because closing costs and selling fees haven't had time to amortize. Stay long enough and appreciation plus principal paydown tip it toward buying. There's no universal answer — only your numbers.
Frequently asked
- What's the breakeven point?
- The number of years you'd need to own for the total cost of buying (net of equity and appreciation) to fall below the total cost of renting and investing the difference. Stay past it, buying wins; sell before it, renting was cheaper.
- Why include an investment return?
- If you rent, the down payment and closing costs you didn't spend can be invested. Ignoring that return overstates the case for buying. This tool counts it.
- Is this financial advice?
- No — it's an educational estimate. Taxes, loan terms, and markets vary. Confirm with a qualified professional before deciding.