Sources verified · May 18, 2026

When does buying pay off — at your numbers?

Year-by-year cumulative cost on both sides — including the opportunity cost of the down payment if invested instead. We surface the break-even year and a ±1pp sensitivity surface on the three biggest assumptions so the answer is honest under uncertainty.

New here? See it work with example numbers:

The home (buy side)

Home purchase price

Loan type

Credit score

Used to derive conventional PMI; FHA MIP uses FHA defaults.

Down payment (% of price)

20% avoids most PMI.

Mortgage rate (APR %)

Freddie Mac PMMS is the canonical reference.

Mortgage term (years)

Carrying costs (editable defaults)

Property tax rate (% of home value, annual)

U.S. national effective average ≈ 1.1%. Tax Foundation has per-state 2024 figures.

Maintenance (% of home value, annual)

1.5% is the standard convention. Older homes and HCOL labor markets run higher.

Annual HOA dues (0 if none)

HOA growth (% / year)

Annual homeowner's insurance

Do not add PMI here; PMI or FHA MIP is modeled separately.

Transaction costs

Closing costs at purchase (% of price)

Typical 2–5%. Varies by state and lender.

Selling costs at sale (% of sale price)

Agent commission + closing on the sell side. 6–8% is typical.

The rent comparable

Monthly rent for a comparable place

What you'd pay today to rent a place that gives you what owning would.

Renter's insurance (monthly)

Use your expected monthly premium. $20/mo is the default estimate.

Growth-rate assumptions (nominal)

Home appreciation (% / year, nominal)

Nominal growth before subtracting inflation. Long-run U.S. national home-price growth is often closer to 3-4% nominal.

Rent growth (% / year, nominal)

Nominal annual rent increase before the inflation adjustment.

Investment return on down payment (% / year, nominal)

Nominal annual return before inflation, taxes, and fees.

Inflation (% / year)

Used server-side to derive real after-inflation assumptions.

Tax treatment

Itemized mode estimates only the incremental federal deduction value of owning.

Planning horizon

How many years are you projecting?

Typical owner holding period is 7 years. Use longer if you're planning to stay put.

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What this tool does and doesn’t do

Does: mortgage amortization (P&I), property tax on appreciating home value, HOA dues with HOA growth, homeowner's insurance, maintenance as a percent of home value, purchase closing costs, selling costs at sale, rent plus renter's insurance, rent growth, and the opportunity cost of the buyer's upfront cash invested instead at a user-supplied real rate. Conventional PMI is derived from credit score and original down payment and stops when projected loan-to-value reaches 80%; FHA runs with upfront MIP and annual MIP. Optional itemized federal tax treatment uses filing status, standard deduction, SALT cap, annual income as a MAGI proxy, marginal tax rate, state/local taxes, and other itemized deductions. The output compares year-by-year cumulative net cost, finds the break-even year, runs ±1pp sensitivity on appreciation, rent growth, and investment return, and offers an affordability follow-up only when the rent-vs-buy result favors buying.
Doesn’t yet: capital-gains exclusion on home sale ($250k single / $500k MFJ), points, rate buydowns, lender-specific mortgage-insurance pricing, VA/USDA loan programs or guarantee fees, ARM rate resets, refinance scenarios, rental-conversion paths, 1031 exchanges, state-specific real-estate quirks like California's Prop 13 reassessment, or the non-financial tradeoffs of owning versus renting.
This is a planning estimate. Every input is a visible, editable assumption — the result depends on them. Confirm important decisions with a qualified real-estate professional, mortgage broker, and tax professional.