Enter your numbers and find out whether renting or buying makes more financial sense for your situation.
It depends on how long you plan to stay. With mortgage rates above 6% in 2025, buying generally makes financial sense if you plan to stay 5+ years. If you might move within 3-4 years, renting is often smarter because closing costs alone take years to recoup.
The break-even point is when the total cost of buying equals the total cost of renting. In most US markets in 2025, this is typically 4-7 years. Use our calculator above to find your specific break-even point based on your local home prices and rent.
No — this is a common myth. When you buy, you also "throw away" money on mortgage interest, property taxes, insurance, and maintenance. In the early years of a mortgage, most of your payment goes to interest, not equity. Renting can be the smarter financial choice depending on your situation.
The minimum down payment is 3% for conventional loans and 3.5% for FHA loans. However, putting down less than 20% means you'll pay PMI (Private Mortgage Insurance), adding $100-300/month to your payment. A 20% down payment is ideal if you can afford it.
The price-to-rent ratio is the home price divided by annual rent. A ratio below 15 suggests buying is better. Between 15-20 is neutral. Above 20 suggests renting may be smarter. For example, a $400,000 home with $2,000/month rent has a ratio of 16.7 — borderline, requiring a full calculation.