Plug in a few numbers and we'll walk you through the long-term cost of owning versus renting, in plain English. And when a seller pays your closing costs, your break-even point is a lot sooner than you think.
What the home costs today
$80,000 upfront
Annual interest rate
How long the mortgage lasts
Closing costs and the seller credit are set in the closing cost baseline just below - $10,400 in estimated closing costs, $10,000 paid by the seller.
What you pay today
How much rent rises each year
Set automatically from the tiered estimate for a $400,000 home. See the note at the bottom of the page.
Typically 2-3% of the price ($8,000-$12,000)
2.5% covered by the seller
Positive = points you buy. Negative = a lender credit.
Rate becomes 6.000% (0.25% per point, a rule of thumb)
$80,000 down + $400 closing + $0 points
Why This Matters: a seller credit is cash you do not have to earn back, so it frees up money for your down payment and dramatically shortens your break-even point versus renting. Right now buying pulls ahead in 2 years, 3 months versus year 4 with no seller help. Everything below (the charts, the tables and the break-even) already uses these two numbers.
Buyers Have More Leverage in Today's Market Than They Realize.See how to reach your break-even faster. Paired with our "Stop Asking for Price Cuts" strategy, you can dramatically lower your break-even point.With the seller paying $10,000, buying a home breaks even after 2 years, 3 months.
After 10 years
Buying Comes Out Ahead
by $145,862
What Owning Builds for You
Your equity after paying to buy and to sell.
What It Costs to Get In
What Renting Leaves You
Every rent dollar you paid over this period. It is not coming back to you, it is completely lost.
Rent is effectively 100% interest: $348,620 paid, $0 kept. Versus owning a home turns part of every payment into equity you get to keep, which is why the two columns above are not the same kind of money.
Inverted view: each bar is buying minus renting (what you own by owning, less what you would have if you rented and invested the difference). Below zero you are still earning back the upfront costs. Above zero you are ahead by owning, which happens in year 3.
Closing costs (total)
$10,400
Seller credit
− $10,000
Closing costs you pay
$400
Cost to sell in year 10
$32,254
The $400 in closing costs you pay is already counted: on the renting side that same cash stays invested and grows, so it is never charged to buying twice.
Even with every fee included, buying is ahead by $145,862 after 10 years.
The seller covering $10,000 of your closing costs pulls break-even to 2 years, 3 months - money you don't have to earn back.
The main net-worth graph already reflects these costs when "include closing & selling costs" is on.
Every chart and total below updates as you type.
Same as the "years to stay" slider, 1 to 30 years.
$400,000 today, about $137,567 of growth.
Your home value grows at 3% per year, compounded monthly on the current value rather than the original purchase price. We default to a conservative 3%, which sits below the long-run national trend, so the buying case is not propped up by an optimistic assumption.
U.S. median home price, 1985 to 2025
About 4.1% per year over 40 years
Prices dipped after 2007 and still finished far higher than where they started. That is the pattern the two presentations below walk through.
Part of every mortgage payment creates equity for you that you get to keep. We like to refer to this as forced savings. Renting is effectively 100% interest: none of it comes back, nor do you have anything to show for it. Over 10 years you build $52,206 of principal (23% of what you pay the bank), versus $348,620 in rent you never see again.
Left column of each pair = your mortgage payment (principal + interest). Right column = rent for that same year. Hover or tap any year to see how it is calculated.
The renter has zero to show for the $348,620 they paid in rent over the last 10 years, while the home buyer finished with $269,772 in equity. This is why buying a home wins over renting, nearly every single day.
Break-even is the year buying overtakes renting, with closing and selling costs included. Each row changes one assumption and leaves the rest of your inputs alone - click any row to apply it and watch the whole page update.
Mortgage rate
Rent growth
Home appreciation
Buying tends to win if you plan to stay in the house roughly three to four-plus years, long enough for principal, appreciation and rising rents to outweigh closing and selling costs. And the win buying gets right now becomes even stronger when your payment is close to rent, or when you negotiate seller-paid closing costs to cut your cash to close. Exactly where that line falls depends on your rate, rent growth and appreciation. The numbers above are yours, not averages.
Renting usually wins if you are only going to be there a year or two, or you move frequently for work, because you never get enough time to earn back the closing and selling costs. It also wins when prices are flat and the costs of owning (taxes, insurance, repairs, HOA) run high. You keep flexibility and can invest your down payment elsewhere.
The calculator above starts from a $400,000 home with 20% down at 6% for 30 years, compared against $2,500 a month in rent rising 3% a year. Everything below reflects that scenario, and every figure updates the moment you change an input.
Month to month, renting often looks cheaper. Over time it usually is not. In the default scenario on this page, a $400,000 home with 20% down at 6% leaves the owner ahead by $145,862 after 10 years, even after closing costs and the cost of selling. Rent is effectively 100% interest: $348,620 paid over 10 years with nothing kept.
In this scenario buying passes renting in year 3. As a rule of thumb, three to four-plus years in the home is usually enough for principal paydown, appreciation and rising rents to outweigh closing and selling costs. Negotiating seller-paid closing costs pulls that break-even point sooner.
This calculator estimates closing costs on a tiered percentage of the purchase price: 3% up to $250,000, 2.75% to $350,000, 2.6% to $450,000, 2.5% to $550,000, and 2.35% above that. On a $400,000 home that is $10,400. A seller credit lowers what you bring to the table dollar for dollar, so a $10,000 credit leaves $400 for you to pay. It is an estimate, not an itemized quote.
Often yes. Seller credits toward closing costs are common and normally negotiated in the purchase contract, within program limits. Because a credit reduces your cash to close without changing the home's equity, it is one of the fastest ways to pull your break-even point forward. Enter the dollar amount in the closing cost baseline and every number on the page updates.
Rent buys you a place to live, but it builds no equity. Over 10 years at $2,500 per month rising 3% a year, that is $348,620 paid, with $0 to show for what you paid over the last 10 years. Part of every mortgage payment creates equity for you instead: $52,206 of principal in the same period.
Principal and interest, property taxes, homeowners insurance, maintenance, HOA dues, mortgage insurance when you put less than 20% down, closing costs (net of any seller credit), discount points or lender credits, home appreciation, and the cost of selling. On the renting side it includes rent with annual increases plus the investment return you would earn by investing your down payment and closing costs instead.
The default assumption is 3% per year, a conservative figure next to the long-run national history of US home prices. The appreciation card on this page shows the historical trend and links the source documents so you can check it and change the rate yourself.
Figures reference the default scenario: break-even in year 3, cash to close $80,400.
Send your scenario to Mike and his team, or book a call directly below.
Prefer to talk it through? Pick a time that works for you.
Booking unlocks once you send your scenario, so Mike has your numbers before the call.
Your information is used only to respond to your mortgage inquiry and is not sold. This is not a loan application and does not constitute any type of formal loan approval.
About closing costs: closing costs are estimated using a tiered percentage of the purchase price: 3% up to $250,000, 2.75% from $250,001 to $350,000, 2.6% from $350,001 to $450,000, 2.5% from $450,001 to $550,000, and 2.35% above $550,000. This is not an itemized quote. Actual closing costs vary by lender, title and escrow company, county, and property, and typically include origination and underwriting fees, appraisal, credit and flood reports, title insurance and settlement fees, recording fees and transfer taxes, plus prepaid interest and escrow deposits for property taxes and homeowners insurance. Seller credits, lender credits, and down payment assistance programs can offset part of them. Your official figures come from a Loan Estimate issued after a full application.
Important disclosure: this calculator is provided for general educational and illustrative purposes only. It is not a loan approval, a pre-approval, a rate lock, a Loan Estimate, an offer or commitment to lend, or a quote of any kind. All figures shown are estimates based on the assumptions you entered and are not guaranteed. Interest rates, payments, closing costs, taxes, insurance, home values, rents and investment returns change over time and will differ from these estimates. Actual loan terms depend on a complete application, credit review, income and asset documentation, property appraisal, program eligibility and underwriting approval. Nothing here should be interpreted as legal, tax, accounting or investment advice.
This is a simplified estimate. Actual results depend on taxes, closing costs, deductions, and your personal situation. Consult a licensed lender, tax professional and financial advisor before making a decision. Equal Housing Opportunity.