Rent vs. Buy Calculator
Is it cheaper for you to rent or buy? We'll show you how many years it will take before the cost of buying equals the cost of renting – the breakeven horizon. If you'll stay in your home past the breakeven horizon, consider buying; if you'll move sooner, renting might be a better option.
Zillow has a super-fun calculator to determine your break-even point to buy over renting! Click here to play with your numbers.
For example:
Cost: After 2 years, your total cost of homeownership (down payment, mortgage, taxes, etc.) for a $180,100 home in Dallas, TX would be $75,080. Your total cost to rent would be $41,063. Renting leaves you with $34,017 in your pocket (including the money you didn't spend on a down payment).
Gain: After 2 years, if you buy, your home will have $59,651 in equity (available to you when you sell). However, if you instead rent and invest your down payment and the other money you save, at a 6% return rate it will earn around $3,862 in 2 years.
Bottom line: Looking at your gross costs, equity and investment potential, it's better for you to buy than rent if you plan to live in your home more than 1 year and 8 months.
