The rent-versus-buy calculator has been a staple of personal finance sites for years, but it keeps giving Americans a different answer.
According to recent analyses of housing and rental data, buying now comes out ahead of renting in a growing number of major metros — a shift that would have sounded absurd in 2021, when mortgage rates were half what they are today.
It depends entirely on how long you plan to stay put.
The old rule of thumb said you needed to own a home for about five years to break even after closing costs, agent commissions and moving expenses.
In today's market, that break-even window has stretched closer to seven to ten years in expensive coastal cities, according to separate analyses from real estate research firms.
In cheaper Midwest and Southern markets, it's often back under four years.
A rent-vs-buy calculator isn't comparing a monthly mortgage payment to a monthly rent check.
It's weighing the equity you build plus any price appreciation against what you'd earn investing the down payment instead — minus property taxes, insurance, maintenance and the roughly 6% to 10% you'll lose when you eventually sell.
At 7% mortgage rates, a $400,000 loan costs about $2,660 a month in principal and interest alone, before taxes and insurance.
A calculator will compare that to renting something similar for, say, $2,200 and ask: does the forced savings of a mortgage beat the flexibility and lower monthly cost of renting, once you factor in a 10% down payment sitting in a savings account earning 4%?
It's genuinely close in a lot of markets right now.
The inputs that swing the answer the most are the ones people guess at.
What return could you get on your down payment?
Change the "stay for five years" assumption to "stay for twelve," and the calculator often flips from a $40,000 win for renting to a $60,000 win for buying.
A few practical notes if you're running the numbers yourself.
Use your real marginal tax rate when the calculator asks about the mortgage interest deduction — most filers now take the standard deduction, so that benefit is smaller than it used to be for many households.
Add 1% of the home's value per year for maintenance, which calculators often bury or ignore.
And use your actual rent, not a market average, since renewal increases have been running 3% to 5% in many cities.
Renters also get a benefit calculators can miss: the down payment stays invested and liquid.
A $60,000 down payment earning 4% throws off about $2,400 a year, and you never get a $9,000 bill for a new roof.
It means the "throwing money away on rent" line has always been a slogan, not a spreadsheet.
Run the calculator with your real numbers, your real timeline, and your real tolerance for a surprise furnace replacement.
Final Thoughts
The answer you get may not match what your parents were told — and that's fine.