Compare the long-term cost of renting against buying — including home appreciation, selling costs, and what your down payment could have earned if invested instead.
Comparing a mortgage payment to a rent check misses most of what actually determines which is cheaper. Buying ties up a large down payment and closing costs that a renter keeps free to invest elsewhere; buying also builds equity that comes back (mostly) when the home is eventually sold, while every rent payment is gone for good. This calculator nets all of that together — what you'd actually spend and actually get back under each path — into a single "average monthly cost" for any given length of stay.
Buying involves large one-time costs — the down payment, closing costs, and eventually selling costs — that get spread thinner the longer you stay in the home. Rent has no such upfront drag, but it also never builds equity and never gets cheaper relative to itself over time the way a fixed mortgage payment effectively does as inflation erodes its real cost. The result is usually a crossover point: renting cheaper for a short stay, buying cheaper for a long one.
Because the money you'd otherwise sink into a down payment could instead be invested and grow — the better that money performs elsewhere, the more it costs you in opportunity terms to have it tied up in home equity instead.
No — this is a purely financial comparison. Stability, the freedom to renovate, not dealing with a landlord, or the flexibility of renting are real considerations this calculator can't weigh for you.
Because they're a large one-time hit — typically 6-8% of the sale price — that has almost no time to be offset by home appreciation or years of avoided rent if you sell soon after buying. That's the single biggest reason buying tends to lose to renting over short holding periods.
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