Use comparable homes only
The ratio only works when the rent and the price describe the same kind of home — same size, area and condition. Comparing a 3-bed house price to a 1-bed apartment rent makes buying look far worse than it is.
Every assumption, in the open
Defaults are national-median starting points, not predictions. Change any of them — the result updates instantly and nothing else is hidden in the math.
- • Home price $420,000 — near the 2025 US median existing-home sale price (NAR).
- • Mortgage rate 6.5% on a 30-year fixed — in line with Freddie Mac PMMS averages in 2025–2026.
- • Home appreciation 3.5%/yr and rent growth 3.5%/yr — close to long-run FHFA HPI and CPI shelter averages.
- • Property tax 1.1% of value and maintenance 1% of value per year — common planning rules of thumb; check your county rate.
- • Insurance $1,900/yr — roughly the national average homeowners premium; coastal states run far higher.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
What is a good price-to-rent ratio?
Below 15 generally means buying is cheaper than renting over time; above 20 means renting usually wins unless you'll stay a long time or expect strong appreciation.
Does the ratio include mortgage rates?
No — that's its weakness. At 6.5% rates, the 'toss-up' zone effectively shifts lower, which is why this tool also shows the first-month owning cost.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last editorial review
Reviewed on a rolling quarterly cycle. Dated reviews are published on the methodology record for each calculator.
Editorial standards
See our editorial policy and disclaimer. Results are estimates, not advice.