Compares the true net cost of both paths over time, including opportunity cost of your down payment.
This is a cost comparison over a fixed number of years, not a verdict on ownership. The year count is the input that decides the answer, so set it honestly.
On a $400,000 house, closing costs at the page's 3% assumption are $12,000 paid on day one, before a single payment. That money buys no equity. It is gone the moment you close.
Now suppose you sell after five years. At 3% annual appreciation the house is worth about $463,710, and selling costs at the page's 6% assumption take about $27,823. Add the two together and the round trip cost roughly $40,000, before counting a dollar of mortgage interest, tax, or maintenance.
That is the arithmetic behind the year slider. Spread $40,000 over two years and it is $20,000 a year of pure friction; spread it over ten and it is $4,000. Meanwhile the buying side is also building equity, and the rent side is credited with whatever the down payment would have earned invested. The calculator nets all of it and reports which side costs less — which is why the same house can win at ten years and lose at three.
The result is a net cost, not a monthly payment. It includes the money you never see again — interest, tax, insurance, maintenance, closing and selling costs — and nets out the equity you walk away with. Renting's number includes rent minus the investment gain on the down payment.
If you would not actually invest the down payment, that credit is fictional and renting looks better on the page than it would in your life. Setting the investment return near zero gives the honest comparison for someone who would spend the cash instead.
What the model leaves out, in both directions: the mortgage interest and property tax deductions, mortgage insurance, HOA dues, repairs beyond the maintenance percentage, moving costs, and the non-financial value of a fixed payment versus the freedom to leave. It also assumes steady appreciation and steady returns, which neither market provides.
Read it as a five-year question, not a life question. If the answer flips when you move the year slider by two, the decision is closer than either slogan suggests.
Long enough to spread the closing and selling costs over more years than the rent increase costs you. On most inputs that is somewhere between five and eight years, and the exact number moves with your local tax rate and how fast rent rises. Move the year slider and watch where the sides cross.
No. Owners also pay interest, tax, insurance, and maintenance that they never recover. Renting buys flexibility and caps your housing cost at the rent. The calculator compares the two cash flows rather than the two feelings.
Because the down payment has an opportunity cost. A higher assumed return makes renting look better, since the renter keeps that capital working. A lower return tilts the comparison toward buying.
It is a rough but workable convention, since expensive houses tend to have expensive roofs. A new build needs less early on and a 40-year-old house needs more, so treat the percentage as an average over your time horizon rather than a yearly budget.
It can, which is the problem. Appreciation is a guess, and a comparison that only works at 4% a year is a bet on prices, not a housing decision. Test the same scenario at zero and see whether buying still works for you.
It is not modeled. For most households the standard deduction is larger than the mortgage interest they could itemize, so the benefit is smaller than the sticker suggests. Ask a tax professional about your own situation.
The cost stack and its percentages are this page's stated assumptions, listed above the result. The buying process is the CFPB's.
Last updated: November 2, 2026. Reviewed by David Liu. Appreciation and investment returns are inputs you supply, not forecasts.