Is it cheaper to rent or buy in 2026?

It depends on the price-to-rent ratio in your area, mortgage rates and how long you stay. With rates near 6.6% and the median home near $440,000, buying usually needs 5+ years of staying put to beat renting the same quality of home.

What is the break-even point when buying a home?

The year when the total net cost of owning drops below the total net cost of renting — typically 4 to 8 years, driven mostly by the one-time buying and selling costs spreading over more years.

What is a good price-to-rent ratio?

Divide the home price by a year of rent for a similar home. Under about 15, buying tends to win; over about 21, renting tends to win; in between, the details decide.

Rent or Buy Calculator — Which Wins Where You Live

Price of the home

Rent for a similar place

Down payment

How long you’ll stay

yrs

Add what applies to you:

Advanced settings

Property tax, %/yr

Upkeep & insurance, %/yr

Buying costs, % of price

Selling costs, % of price

Renter’s savings return, %/yr

What owning costs, monthly

After 7 years, line by line

The true cost of each path

Everything each path costs you, minus what you get back (equity for the owner, investment growth for the renter). Lower is better. Where the lines cross is the break-even.

What flips the answer

How we calculate

What is included

Buying: down payment, closing costs, monthly mortgage payments, property tax and upkeep — minus what you get back when you sell: the home’s grown value less selling costs and the remaining loan. Renting: the rent, growing each year — minus the growth your down-payment money earns while it stays invested. Both paths are compared month by month for 30 years.

What is estimated or left out

A planning estimate, not advice. We skip the mortgage-interest tax deduction (most people take the standard deduction now), renter’s insurance (small), PMI under 20% down, and rent control. Growth rates are steady lines — real markets zigzag, which matters most if you might be forced to sell in a downturn. The non-money sides — stability, freedom to move, the joy of your own walls — are yours to weigh.

The formula, in plain words

cost of buying(T)  = down + closing + payments + tax + upkeep
                     − (home value(T) − selling costs − loan left)
cost of renting(T) = all rents up to T
                     − growth the invested down payment earned
winner at your year = the smaller number

Common questions

Why does “how long you’ll stay” matter so much?: Buying front-loads huge costs: closing when you buy, commissions when you sell — often 8–10% of the price round-trip. Stay two years and those costs crush you; stay fifteen and they fade to nothing per year. That is why the break-even usually sits around 4–8 years.
Isn’t rent just throwing money away?: You always pay for housing — renters pay rent, owners pay interest, taxes, upkeep and selling fees, none of which build equity either. The real question is which package is smaller for your numbers and time frame. Sometimes it genuinely is renting.
What if home prices boom — or crash?: Open “+ Growth assumptions” and try it: home growth at 6% makes buying look great; at 0% renting often wins. Since nobody knows, run both and see whether your answer survives pessimism.

Rent or Buy