Rent vs buy

This topic helps you compare renting and buying with consistent assumptions. Start with the calculator, then use the checklist guide to tighten your inputs and test realistic scenarios.

Rent vs buy calculator Break-even guide Mortgage payment What is PITI?

Recommended workflow

Estimate the mortgage payment (PITI + HOA + PMI if needed).
Enter a conservative rent growth and home appreciation rate.
Set a realistic holding period and selling cost assumption.
Run a base case, then change one input at a time.

Key inputs to verify

Property taxes and insurance from local quotes.
Maintenance and HOA costs for your property type.
Closing and selling costs that match your market.
Investment return assumptions for cash not used in a down payment.

PITI input checklist

Use the note rate (not APR) for principal and interest.
Convert annual taxes and insurance to monthly amounts.
Add HOA dues and PMI if they apply to your scenario.
Use the same payment assumptions in every scenario you compare.

Short horizon checks

If you may move within a few years, test higher selling costs and lower appreciation. Short horizons are sensitive to transaction costs and can swing the result.

Long horizon checks

Over longer horizons, amortization and appreciation matter more. Run a conservative base case and compare to an optimistic scenario to see the range.

Common mistakes

Using a holding period that is longer than your realistic plan.
Ignoring selling costs or underestimating maintenance.
Comparing results without keeping the same time horizon.
Using an optimistic appreciation rate without a conservative case.

What to gather before you run scenarios

Recent rent comps for similar units in your neighborhood.
A Loan Estimate or rate quote for the mortgage payment.
Local tax rate and insurance quote for the property type.
Expected holding period based on your job or family plan.

How DTI fits in

If you are mortgage shopping, the housing payment in your rent vs buy model also affects DTI. Run the DTI calculator with the same PITI + HOA + PMI figures to confirm affordability under the same assumptions.

Local market checks

Compare rent growth to recent local averages, not national headlines.
Use a conservative home appreciation rate when unsure.
Validate selling costs with local agent estimates.

Guides to read first

Assumptions to model

Holding period, closing costs, and selling costs.
Rent growth and home appreciation scenarios.
Maintenance, taxes, insurance, HOA, and PMI.
Investment return on cash not used for a down payment.

FAQ

What does break-even mean?

Break-even is the point where your modeled outcomes look similar under the assumptions you entered. It is not a prediction.

Do I need to model taxes?

This workflow is simplified and does not model income taxes or deductions. If taxes are important to your decision, model them separately and compare alongside the calculator output.

Should I include moving costs?

Yes. Short holding periods are sensitive to moving and transaction costs. Add them to the scenario where they apply so the comparison stays realistic.

Next steps

Run the calculator Read the guide Mortgage payoff topic

Educational use only. Not financial advice.

Last updated: 2026-02-17