Rent vs Buy Calculator 2026: break-even year, taxes and stress tests

The home and the rental

Quick start

Everything else uses typical assumptions; open the groups below to change them.

Home price

Down payment 20% avoids PMI

Mortgage rate yearly, fixed

Rent for a similar home per month

Years you expect to stay

yrs

Property tax % of value a year; 1.1% is typical

Home insurance + HOA per month

Household income before tax, per year

Sets your tax bracket and whether you'd itemize.

Buying

Loan term

Closing costs % of price; 2–5% is typical

Points % of the loan, paid to lower the rate

PMI % of the loan a year, under 20% down

I'll ask to cancel PMI at 80% (otherwise it ends at 78%)

Maintenance and repairs % of value a year; 1% is typical

Selling costs agent and closing, % of sale price

Move-in costs extra vs renting: repairs, furniture

Year you'd buy sets which tax rules apply

Growth

Home price growth /yr; about 3–4% long run

Rent growth /yr

Investment return /yr, before inflation

What the renter's savings earn, and the buyer's once owning gets cheaper than renting.

Inflation /yr; results in today's dollars

Insurance, HOA, renter's insurance and your income rise with it.

Taxes

Filing status

State and local income tax % of income; 0 if none

Other itemized deductions /yr, e.g. charity

Where the savings are invested

Tax on gains blank = from your income

Home-sale exclusion: I'll live there 2 of the 5 years before selling

Renting

Renter's insurance per month

Security deposit returned when you leave

Broker or application fees one-off

Buying minus renting, if you sold in each year

Your numbers Range under stress Your stay Buying pulls ahead

In today's dollars. Each row is what you'd have if you sold at the end of that year.

Year-by-year home value, loan, equity, investments and costs for buying and renting
Year	Home value	Loan	Equity after sale	Buyer invests	Renter invests	Owner costs so far	Rent so far	Tax saved	Buy − rent

What could go wrong

Buy minus rent under each stress test, and the change from your numbers
Scenario	Sold in year	Buy − rent	Change

Next steps

What this leaves out

State and local transfer taxes, rent control and local property tax rules such as California's Prop 13 reassessment limits.
Refinancing later, adjustable rates and extra payments. The rate is fixed for the whole stay.
What owning or renting is worth to you: space, stability, flexibility, a landlord who fixes things.
Estate effects, such as the step-up in basis when a home passes to heirs.
The 2026 senior deduction, tax credits and the alternative minimum tax. Capital gains are taxed at one rate, not stacked on top of your income.

See how the calculator works for every assumption.