Sources verified · May 18, 2026

When does buying pay off — at your numbers?

Year-by-year cumulative cost on both sides — including the opportunity cost of the down payment if invested instead. We surface the break-even year and a ±1pp sensitivity surface on the three biggest assumptions so the answer is honest under uncertainty.

New here? See it work with example numbers:

The home (buy side)

Home purchase price

Down payment (% of price)

20% avoids most PMI.

Mortgage rate (APR %)

Freddie Mac PMMS is the canonical reference.

Mortgage term (years)

Carrying costs (editable defaults)

Property tax rate (% of home value, annual)

U.S. national effective average ≈ 1.1%. Tax Foundation has per-state 2024 figures.

Maintenance (% of home value, annual)

1.5% is the standard convention. Older homes and HCOL labor markets run higher.

Annual HOA dues (0 if none)

Annual homeowner's insurance

If your down payment is under 20%, add expected PMI to this number as a proxy.

Transaction costs

Closing costs at purchase (% of price)

Typical 2–5%. Varies by state and lender.

Selling costs at sale (% of sale price)

Agent commission + closing on the sell side. 6–8% is typical.

The rent comparable

Monthly rent for a comparable place

What you'd pay today to rent a place that gives you what owning would.

Growth-rate assumptions (real, after-inflation)

Home appreciation (% / year, real)

Long-run U.S. national average is closer to 1% real. Pick a local-market value you believe.

Rent growth (% / year, real)

Real (after-inflation) rent growth. 1–3% is typical in stable markets.

Investment return on down payment (% / year, real)

5% real is the Trinity-Study planning convention. 7% is the long-run S&P 500 pre-tax.

Planning horizon

How many years are you projecting?

Typical owner holding period is 7 years. Use longer if you're planning to stay put.

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What this tool does and doesn’t do

Does: mortgage amortization (P&I), property tax accrual on appreciating home value, HOA, insurance, maintenance %, closing-cost amortization at purchase, selling costs at sale, opportunity cost of the down payment + closing costs invested instead at a user-supplied real rate, rent growth, and year-by-year cumulative net cost comparison with a break-even-year finder. Sensitivity is run at ±1pp on appreciation, rent growth, and investment return.
Doesn’t yet: PMI under 20% down (add to insurance input as a proxy), the mortgage-interest federal tax deduction or SALT cap interactions, capital-gains exclusion on home sale ($250k single / $500k MFJ), ARM rate resets, refinance scenarios, rental-conversion paths, 1031 exchanges, or any state-specific real-estate quirks like California's Prop 13 reassessment.
This is a planning estimate. Every input is a visible, editable assumption — the result depends on them. Confirm important decisions with a qualified real-estate professional, mortgage broker, and tax professional.