Common questions
Which is cheaper, renting or buying?
It depends mostly on how long you stay, what the home costs to carry, what rents do, and (the biggest lever) what your cash could earn if you invested it instead. Buying front-loads big one-time costs (down payment, closing, later selling costs) that need years to amortize; renting avoids them but never builds equity. This calculator totals both paths over your horizon, grows every dollar at your investment return so the opportunity cost is honest on both sides, and shows the winner with the math visible.
Why does the investment return matter so much?
Because a buyer ties up a large down payment plus closing costs, and pays more (or less) each month than a renter. Every dollar either party spends is grown to your horizon at the investment return you set, so the money a renter could invest is credited to renting and the money an owner ties up is charged to owning. It is the most decision-swinging input and the one most calculators quietly leave out, so it is exposed here. The sensitivity heatmap shows how the verdict flips as it changes.
Does it account for the mortgage-interest and property-tax deductions?
Yes, honestly. A renter already gets the standard deduction for free, so only the amount your itemized deductions exceed the standard deduction is a real benefit of owning. The calculator itemizes deductible mortgage interest (on up to $750,000 of loan) plus property tax capped at the SALT limit (a parameter you can set; the 2025–2029 cap is $40,000) and counts only the excess over the standard deduction, valued at your marginal tax rate. On sale, the §121 primary-residence exclusion ($500k married / $250k single) is applied to the gain, and only the excess is taxed. PMI is still not modeled.
What is the equivalent rent?
It is the monthly rent at which the two paths tie at your horizon: the NYT-style bottom line. Pay less than that to rent and renting wins; pay more and buying wins. Because everything else is held fixed, it turns a page of assumptions into one number you can check against real listings.
What is the sensitivity heatmap?
The two assumptions that decide rent-vs-buy are home appreciation and your investment return, and both are guesses. The heatmap runs the full comparison across a grid of the two and colors each cell by the winner and margin, so you can see how fragile or robust the verdict is, and read the plain-English rule, like “buying wins only if appreciation beats about X% and your investments earn under about Y%.”
What is the break-even year?
The first year at which the all-in, opportunity-cost-adjusted cost of owning drops below the cost of renting, evaluated year by year out to 40 years. Before it, the one-time costs of buying and selling dominate and renting wins; after it, ownership economics take over. If owning never wins within 40 years at your inputs, the calculator says so rather than extrapolating.
