Why this calculator refuses to just tell you
Every other tool on this site has one right answer. Give it a balance, a rate and a term and the monthly payment is a fact you can check against a lender's letter. Rent versus buy is not like that. It depends on how fast homes appreciate where you live, what your money would have earned invested instead, how long you actually stay, and how rents move — four things nobody knows in advance.
The consequence is that the answer is unstable in a way most rent-versus-buy calculators hide. In the default scenario on this page, shifting home appreciation from 3% to 5% a year moves the result by roughly $70,000 and reverses which option wins. A calculator that quietly assumes 5% and shows you a confident green tick is not computing anything — it is making an argument. That is why the assumptions here sit on screen, and why the headline number is the appreciation rate at which the two come out level rather than a verdict.
How the comparison is built
Both paths are compared on net worth at the end of the period. The buyer's position is the home's value minus selling costs minus whatever mortgage remains. The renter's is the value of a portfolio funded with the money the buyer sank into the down payment and closing costs, invested from day one.
The important detail is that whoever spends less each month invests the difference. Buying usually costs more monthly, so the renter typically invests the gap — but when renting is dearer, the buyer invests instead. Models that only ever let the renter invest are tilted toward buying without saying so, and the reverse is equally true. This one runs the comparison symmetrically, which you can verify: set every rate to zero, buy the home outright, and the buyer ends ahead by exactly the rent they avoided, no more.
What isn't modelled
The mortgage interest deduction is excluded. Since the standard deduction rose, most filers no longer itemize, so applying it by default would overstate the case for buying for the majority of people — if you do itemize, buying looks somewhat better than shown. Also excluded: capital gains treatment on the home sale or the portfolio, the cost and disruption of moving, the risk that a home does not sell quickly, and anything unpriceable — security of tenure, the freedom to leave, whether you want to be the person who fixes the boiler.
Property tax and maintenance are charged against the home's current value rather than its purchase price, so they rise as the home appreciates. PMI applies while the loan exceeds 80% of the original purchase price and stops automatically after that.
Frequently asked questions
Is it better to rent or buy?
There is no general answer. Change home appreciation by two percentage points and the answer often reverses. That is why this page reports the rate at which the two come out level — a claim you can judge against what you know about your own market.
Why does how long I stay matter so much?
Buying carries large one-off costs at both ends — around 2% to buy and 6% to sell by default here. Those are spread over however long you own, so a short stay can leave you worse off even when the home appreciates well.
Does this include the mortgage interest deduction?
No, for the reason given above. If you itemize, buying will come out somewhat better than the figures here suggest.