Rent vs Buy in 2026: The Real Math

Find your personal break-even with our [Rent vs Buy Calculator](/calculators/finance/rent-vs-buy-calculator).

Monthly Cost: Same $400,000 Property

Renting at $2,200/month:

• Rent: $2,200
• Renter's insurance: $20
• Total: $2,220/month

Buying ($400k, 20% down, 7% rate):

• Mortgage P&I: $2,129
• Property tax (1.2%): $400
• Homeowner's insurance: $150
• Maintenance (1.5%/yr): $500
• Total: $3,179/month — 43% more than renting

The 5-Year Financial Picture

Buying after 5 years:

• Total housing payments: $190,740
• Equity built (principal + appreciation at 3%/yr): ~$111,600
• Net housing cost: $79,140

Renting after 5 years:

• Total rent paid: $133,200
• Difference invested ($959/month at 8%): $70,300 in investments
• Net housing cost: $62,900

Renting comes out ahead by ~$16,000 over 5 years in this scenario.

The 10-Year Flip

After 10 years, buying typically wins. Home equity grows larger, investments stabilize, and the fixed mortgage payment looks cheap compared to rising rents.

The break-even point in most markets: 7-12 years. If you plan to stay longer than the break-even, buying almost always wins.

The Price-to-Rent Ratio Signal

Price-to-Rent Ratio = Home Price / Annual Rent

| Ratio | Implication |

|---|---|

| Under 15 | Buying strongly favored |

| 15-20 | Either can work |

| 20-25 | Renting favored |

| Above 25 | Renting strongly favored |

Most US major cities in 2026 sit at 25-40. Many suburban and smaller markets are 15-20.

When Buying Wins Sooner

• Home appreciates 5%+ per year
• You stay 10+ years
• Mortgage rate drops and you can refinance
• Rent in your area increases rapidly over time

Related Tools

• [Mortgage Calculator](/calculators/finance/mortgage-calculator) — Exact monthly payment
• [Down Payment Calculator](/calculators/finance/down-payment-calculator) — Save for the purchase
• [Closing Cost Calculator](/calculators/finance/closing-cost-calculator) — All upfront buying costs