How it works
What this estimate calculates
This TrueCost comparison gives both paths equal starting resources. The buying path models amortization, ownership costs, home value, remaining debt, and selling costs; the renting path invests upfront cash not used to buy. Each month, the lower-cost path invests the cash-flow difference. Smooth growth assumptions are scenario inputs, not forecasts.
Assumptions to keep in mind
- Mortgage rates and entered cost-growth rates remain constant throughout the comparison.
- Home appreciation and investment return are uncertain scenario inputs, not forecasts.
- Tax effects, moving costs, renovations, and differences in home size or lifestyle are excluded unless explicitly entered.
Reviewed references
Sources behind this calculator
Last reviewed: . These references support the concepts and context; their publishers do not review or endorse TrueCost.
- Making the decision to rent or buy (opens in a new tab)Consumer Financial Protection Bureau
Equity, transaction costs, changing home values, taxes, insurance, HOA dues, and maintenance as comparison factors.
- Rent vs. Buy Calculator (opens in a new tab)Freddie Mac
Treating rent-versus-buy results as estimates that require transaction-specific information.
- Figure out how much you want to spend (opens in a new tab)Consumer Financial Protection Bureau
Including closing costs and recognizing that actual amounts vary.
Questions people ask
What does the break-even point mean?
It is the modeled point when one scenario's cumulative financial position catches the other under the current assumptions. Changing rent growth, appreciation, financing, or selling costs can move it.
Why is mortgage principal treated differently from interest?
Principal reduces the loan balance and can become home equity, while interest is a financing cost. Equity still depends on the home's value and the costs of selling it.
Does a lower projected cost mean I should choose that option?
Not by itself. Flexibility, maintenance responsibility, location, space, risk tolerance, and how long you expect to stay can matter as much as the modeled financial difference.
How should I estimate maintenance costs?
Use an amount that reflects the property's age, condition, systems, and local labor costs. Comparing a lower and higher maintenance scenario is often more informative than relying on one estimate.
Use the result as a starting point
Try a conservative scenario and an optimistic one. If the decision only works under one narrow set of assumptions, that is useful information. For a purchase, loan, tax, or investment decision, confirm the final figures with current documents and an appropriately qualified professional.
Read the full financial disclaimer