For educational purposes only — not financial advice. Learn about our editorial process
Should you rent or buy — on your real timeline?
Buying is cheaper after the break-even point (the year buying has cost you the same total as renting). Before it, renting is cheaper. How long you plan to stay is the factor that decides it — and the one most calculators ignore.
How your mortgage gets paid down, year by year
In the early years, most of each payment goes to interest; the longer you stay, the more goes toward actually owning the home.
When buying becomes cheaper than renting
Total cost of buying = down payment + closing costs (~3%) + mortgage payments + property tax (~1.1%/yr) + insurance (~$1,500/yr) + upkeep (~1%/yr) − what you’d walk away with if you sold (home value minus remaining loan, minus ~6% selling costs). Total cost of renting = monthly rent × months. The break-even year is when buying has cost you the same total as renting — after that, buying pulls ahead.
break-even = the year total cost of buying equals total cost of rentingShort of the break-even, renting is cheaper in total cost. After it, buying pulls ahead — both because you're building ownership in the home instead of paying a landlord, and because the home's value grows on the whole purchase price while the amount you owe keeps shrinking.