Rent-and-Invest Planner: Renting vs Buying, With the Difference Invested
Renting isn't throwing money away if the money you don't spend on owning gets invested. This planner runs both paths side by side with your numbers, and shows the year buying pulls ahead, if it does, and the rent at which the two break even.
Both households spend the same on housing each month; whichever side costs less invests the difference, and the renter also invests the down payment and closing costs. Everything stays in your browser. The rate starts at 7.03%, Freddie Mac's 30-year average on September 24, 2026.
Buying
Renting and investing
| Year | If you buy | If you rent and invest | Ahead |
|---|
Net worth if you buy = home value minus selling costs, minus the mortgage balance, plus anything the owner invested. Net worth if you rent = the renter's investments. Taxes on investment gains, mortgage insurance and moving are left out.
How the Planner Works
Same spending, two paths. Each month the planner adds up what owning costs (principal and interest, property tax, insurance, maintenance and HOA dues) and what renting costs (rent and renters insurance). Whichever is cheaper, that household invests the difference. The renter also invests the down payment and closing costs the buyer spent on day one.
The default example. A $400,000 home with 20% down at 7.03% has $2,135 of principal and interest, and about $3,002 a month all in, against $2,215 to rent a comparable home. With 3% home price and rent growth and a 6% return, the renter is ahead after 5 years ($173,220 to $134,570) and after 10 ($266,257 to $230,519). Buying pulls ahead in year 20, as rent keeps rising and the fixed mortgage payment doesn't. At a 10-year horizon, buying would win if comparable rent were above about $2,395 a month.
Reading the Result
- The break-even year is the answer to "how long would we need to stay?" Buying's upfront and selling costs take years to earn back, so short stays usually favor renting.
- The break-even rent is a quick test for your market: if comparable homes rent for more than that, buying looks better over your horizon.
- Home price growth and the investment return move the answer most. Try a lower return and a higher price growth, and the reverse, before deciding.
- Renting only wins if the difference really gets invested. Money the renter spends instead doesn't count.
What the Planner Leaves Out
It ignores taxes: the renter would owe tax on investment gains outside retirement accounts, while most owners can exclude up to $250,000 of home-sale gain ($500,000 for married couples), and a few owners itemize mortgage interest. It leaves out mortgage insurance on down payments under 20%, the costs of moving between rentals, major renovations and rent-control protections, and the value of stability, which no spreadsheet captures. For today's rates, prices and payment-to-income, see our mortgage and housing statistics; if you already own at a low rate, the mortgage lock-in calculator shows what moving would cost.