Rent vs Buy Calculator: The Real Math for 2026

The rent vs buy debate is frequently oversimplified. Most calculators compare only the mortgage payment vs rent — ignoring opportunity cost of the down payment, maintenance, property taxes, and transaction costs. Here's the full accounting.

True costs of owning (often ignored)

• Down payment opportunity cost: $80,000 down payment invested instead at 7% = $627,000 over 30 years vs building equity
• Transaction costs: Buying (2–5% of purchase price in closing costs) + selling (5–6% agent commission) = 7–11% of home price, or $28,000–$44,000 on a $400,000 home
• Maintenance: 1–2% of home value annually = $4,000–$8,000/year on a $400,000 home
• Property tax: 0.5–2.5% of value annually = $2,000–$10,000/year
• Insurance: $1,200–$3,000/year for homeowners
• HOA fees: $0–$500+/month where applicable

The break-even timeline

Due to transaction costs, buying is almost never financially superior to renting if you move within 3 years. The New York Times Rent vs Buy Calculator (the gold standard) shows that at 6.7% mortgage rates, renting is financially competitive with buying in most major metro markets for people who might move within 5–7 years.

When buying wins clearly

• You'll stay 7+ years in the same location
• Local rent prices are at or above equivalent mortgage payment
• You've saved 20% down payment and 3-month emergency fund still intact after closing
• Your income is stable (dual income household provides significant hedge)