{
  "@context": "https://schema.org",
  "@type": "Dataset",
  "name": "How do you calculate whether to rent or buy a home?",
  "description": "Compare net worth at the date you'd move: the buyer's home value after 6% selling costs, minus the loan balance, versus the renter's down payment and closing costs invested plus any monthly savings invested. Whichever is larger wins; the first year buying pulls ahead is your break-even.",
  "url": "https://www.revenuelab.fyi/answers/how-to-calculate-rent-vs-buy",
  "dateModified": "2026-10-01",
  "creator": {
    "@type": "Organization",
    "name": "RevenueLab",
    "url": "https://www.revenuelab.fyi"
  },
  "license": "https://creativecommons.org/licenses/by/4.0/",
  "keywords": [
    "Rent vs Buy Net Worth Calculator",
    "Rent vs Buy Break-Even Calculator",
    "Price-to-Rent Ratio Calculator",
    "Down Payment Opportunity Cost Calculator"
  ],
  "distribution": {
    "@type": "DataDownload",
    "contentUrl": "https://www.revenuelab.fyi/api/public/page.json?path=answers%2Fhow-to-calculate-rent-vs-buy",
    "encodingFormat": "application/json"
  },
  "json": {
    "type": "answer",
    "question": "How do you calculate whether to rent or buy a home?",
    "shortAnswer": "Compare net worth at the date you'd move: the buyer's home value after 6% selling costs, minus the loan balance, versus the renter's down payment and closing costs invested plus any monthly savings invested. Whichever is larger wins; the first year buying pulls ahead is your break-even.",
    "tableTitle": "The five numbers that decide rent vs buy",
    "columns": [
      "Input",
      "Default",
      "Why it matters"
    ],
    "rows": [
      {
        "label": "Years you'll stay",
        "value": "7",
        "note": "Spreads the ≈9% round-trip transaction cost"
      },
      {
        "label": "Price-to-rent ratio",
        "value": "15.9",
        "note": "$420,000 ÷ ($2,200 × 12)"
      },
      {
        "label": "Mortgage rate",
        "value": "6.5%",
        "note": "Drives interest, the largest unrecoverable cost early on"
      },
      {
        "label": "Appreciation vs rent growth",
        "value": "3.5% / 3.5%",
        "note": "Equity growth vs rising rent"
      },
      {
        "label": "Investment return",
        "value": "6%",
        "note": "What the renter's cash earns instead"
      }
    ],
    "context": "The common shortcut — comparing a mortgage payment to rent — misleads because it ignores equity, transaction costs and the return on cash the renter keeps. A fair comparison gives both paths the same starting cash and the same monthly budget, and lets whichever side spends less invest the difference.",
    "methodology": "Assumptions (all editable in the calculators): $420,000 home (≈2025 US median, NAR), 10% down, 6.5% 30-year fixed (Freddie Mac PMMS range), 3.5%/yr appreciation and rent growth (long-run FHFA HPI / CPI shelter), 1.1% property tax, 1% maintenance, $1,900/yr insurance, 3% buy and 6% sell costs, 6%/yr investment return. Excludes mortgage interest deduction, capital-gains tax and PMI.",
    "dateModified": "2026-10-01",
    "relatedCalculators": [
      {
        "label": "Rent vs Buy Net Worth Calculator",
        "to": "/rent-vs-buy-net-worth-calculator"
      },
      {
        "label": "Rent vs Buy Break-Even Calculator",
        "to": "/rent-vs-buy-breakeven-calculator"
      },
      {
        "label": "Price-to-Rent Ratio Calculator",
        "to": "/price-to-rent-ratio-calculator"
      },
      {
        "label": "Down Payment Opportunity Cost Calculator",
        "to": "/down-payment-opportunity-cost-calculator"
      }
    ],
    "relatedReading": [
      {
        "label": "How many years to break even",
        "to": "/answers/rent-vs-buy-break-even-how-many-years"
      },
      {
        "label": "Is it cheaper to rent or buy?",
        "to": "/answers/is-it-cheaper-to-rent-or-buy-a-house"
      }
    ]
  }
}