Rent vs buy calculator

Did buying beat renting and investing? Tell us where, when and what you paid. We fill in the rest from history, show every assumption so you can change it, and show the math year by year.

  1. 01The essentials
  2. 02Here's what we assumed
  3. 03How we got there

01The essentials

Blank uses U.S. medians.

Held through 2026, in whole years.

$

Blank uses 20%.

$

Optional once the year and price are in.

That is all we need. The verdict updates as you type; step 02 shows every other number we used.

=Verdict

Enter the year you bought and the price. Everything else has a default you can change in step 02.

What it compares

Buying: the sale price today less selling costs (6% by default) and the mortgage left, plus anything the owner invested in months when owning cost less than rent. Renting: the same starting cash in the chosen benchmark (S&P 500 by default), plus each month’s saving when rent cost less than owning. Both are compared after tax, as if everything were sold today. The mortgage rate is the purchase year’s Freddie Mac average, refinanced when a later year averages a point lower. Rent at purchase is the price over the state’s price-to-rent that year: Census of Housing (1970–2000) and American Community Survey (2021 on) median value over median rent, filled between those years with FHFA home prices over BLS CPI rent (served by our research API). Rent then follows local CPI rent year by year, scaled to meet today’s ratio. If that data is unavailable, a national estimate is used and the page says so.

Where the local numbers come from

Property tax rates are state medians from the Census Bureau’s 2024 American Community Survey, except California from 1978: Prop 13, 1.10% (1% plus local levies, Board of Equalization statewide average) of an assessed value that starts at the price and rises at most 2% a year. Rent, when you do not enter it, is anchored at both ends: at purchase, the price over the period’s price-to-rent ratio (about 12 in the early 1980s, 20 in the 2000s, 30 by 2025, from housing research); today, the value today over the state’s price-to-rent (ACS 2024 median value over median rent). In between it follows BLS CPI rent of primary residence (FRED CUUR0000SEHA), with one constant yearly adjustment so it meets both ends. A rent you enter grows with CPI rent alone, unless you also enter today’s rent. Mortgage rates are Freddie Mac’s weekly survey (FRED MORTGAGE30US), averaged by year. Offline snapshots run through 2025; later years use long-run averages and say so. Value today, when blank, moves the price with the FHFA state house price index (offline snapshot through 2026 Q2). State income tax brackets are the Tax Foundation’s 2026 table (as of January 1, 2026), married filing jointly, checked against state revenue departments. Insurance is 0.5% and maintenance 1% of value a year unless you change them.

How returns compound

Each year’s total return (price change plus dividends) is chained geometrically: money grows by (1 + r) in each year, applied monthly as (1 + r)^(1/12) so twelve months give exactly one year’s return, and a whole hold is the product of (1 + r) over its years, never an average return times the years. That product equals the exponential of the summed log returns, which the tests check over the 45 years from 1981. A deposit made mid-hold compounds only from its own month. Dividend tax, when on, is taken out as dividends arrive, and what is left is reinvested.

How income tax works

Federal tax uses each year’s law, married filing jointly, 1970 to 2026: brackets (Tax Foundation history, checked against IRS Statistics of Income Table 23; 2026 from IRS Rev. Proc. 2025-32), personal exemptions to 2017, the standard deduction, the 1970s maximum tax on wages, the SALT cap from 2018 and the mortgage-debt limits. The buyer’s saving each year is the real difference in tax with and without deducting mortgage interest and property tax. Household income, if you leave it blank, is set so first-year housing costs are 28% of gross income, then grows with the Social Security average wage index, so each year lands in that year’s bracket. Dividends are taxed each year and gains once on sale today under the law of the time (ordinary rates on dividends before 2003; the 50% and 60% capital gains exclusions before 1987; 0/15/20% now). State tax works the same way for the ten built-in states: each year’s law at that year’s income, the saving is the state tax with and without the home deductions where the state allows them, the state tax each side pays counts toward federal SALT (capped from 2018), and dividends and gains are taxed as ordinary income under that year’s state law. California uses Franchise Tax Board tables from 1970, including the 1% surcharge over $1 million (Prop 63, 2005) and the Prop 30/55 top brackets; the other states use NBER TAXSIM tables from 1977 (earlier years reuse 1977) and state brackets from 2022. Texas and Florida have no income tax. Pick a federal bracket, or enter a state rate, to use one flat rate for every year.

What it leaves out

Whole past years only. State tax follows each year’s law for the ten largest states (others entered by hand as one rate); California’s deduction and credit phase-outs, its pre-1987 partial capital gains inclusion and state mortgage-debt limits are left out, and non-California years before 1977 reuse 1977. Home sales get the $500,000 joint exclusion. Left out: AMT, the 3.8% investment income tax, phase-outs of deductions and exemptions, dependents and local income tax. Insurance and maintenance scale with the home’s value, and so does property tax outside California. HOA stays flat. Nominal dollars. Not advice.