How the rent vs buy cost calculator works
What the true cost of owning includes
The mortgage payment is the start, not the story. Property taxes (~1.1%), insurance (~0.4%), maintenance (budget 1% of value yearly — the roof does not care about your spreadsheet), possible PMI, and the opportunity cost of the down payment (what that cash could earn invested). Against all that: every principal dollar is savings you keep, and appreciation is real wealth after ~7% selling friction.
What renting costs beyond the check
Rent grows — historically 3–5% a year, which compounds. Renters forgo appreciation and forced savings. What renters keep is flexibility (the ability to take the job in another city for free) and the return on the down payment they never spent, which the calculator credits at your investing rate.
The horizon is the verdict
Almost every input is debatable; the years-you-stay line is not. Under ~3–4 years, transaction costs (7% round trip plus closing) dwarf any appreciation, and renting wins in nearly every market. Past 7–10 years, ownership wins in most of them. Between 4 and 7, it is genuinely close and depends on your local price-to-rent ratio — which is exactly what this calculator measures.