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Rent v Buy

Methodology and Data Sources

This page documents exactly how the calculators on RentVBuy.net produce their results: the model that runs the comparison, every default we start you with, and the source behind every location figure. Nothing here tells you to rent or buy. It shows you what the math does so you can check it.

The calculation model

Every rent vs buy result on this site comes from a single month-by-month simulation. It runs over the ownership horizon you set and tracks the full cost of each path, so the comparison reflects both cash flow and net wealth rather than a single monthly payment.

On the buying side, the model tracks principal and interest, property taxes applied to the appreciating home value, homeowners insurance, HOA fees, and PMI, which it removes automatically once the loan-to-value ratio reaches 80%. It adds annual maintenance as a share of the current home value, counts your upfront buyer closing costs, and subtracts projected seller closing costs at the time of sale. The home value appreciates at the rate you set, compounded monthly.

On the renting side, it tracks rent that grows at your chosen rate, renters insurance, and any move-in costs. In any month that buying costs more than renting, the model assumes the difference is invested at your investment return rate, so the renter's portfolio grows the same money a buyer would have put toward the house.

The break-even point is the year when the cumulative cost of buying drops below the cumulative cost of renting on a net basis. The opportunity-cost comparison goes one step further. It accounts for what your down payment and closing costs would have grown to if you had invested them instead of putting them into a home.

All figures are in nominal, not inflation-adjusted, dollars, so appreciation, rent growth, and investment return compound in the same terms. Results are estimates built on your inputs and a stated set of assumptions. Actual costs vary by location, lender, and market conditions.

Default assumptions and their values

The calculator opens on an Average US starting scenario: a $450,000 home with $2,200 monthly rent. These are adjustable national-average starting points, not claims about any specific place. State pages and metro pages replace them with that location's own sourced figures. You can override every one of them.

The starting values are:

  • Down payment: 20% of the home price
  • Mortgage rate: 6.75%
  • Loan term: 30 years
  • Time in the home: 7 years
  • Property tax: 1.1% of home value per year
  • Homeowners insurance: $1,800 per year
  • Rent growth: 3% per year
  • Home appreciation: 3.5% per year
  • Investment return: 7% per year
  • PMI: 0.85% per year, removed automatically at 80% loan-to-value
  • Maintenance: 1% of home value per year
  • Buyer closing costs: 3% of the home price
  • Seller closing costs: 6% of the sale price

The 6.75% mortgage rate is a starting point you should replace with a real quote. Rates move constantly, so the default is a round, recent figure rather than a live feed.

The annual data study is different. It uses the current 30-year fixed rate from the Freddie Mac Primary Mortgage Market Survey as of its publication date, so the study reflects a specific, dated, sourced rate while the calculator default stays a general starting point.

Data sources

Every location figure on the site traces to one seed file, and every source below resolves to an authoritative origin. State and metro pages draw from that seed, never from a neighboring area's numbers.

Sources by figure:

For how we research, review, and correct this content, see our Editorial Policy.

By Barron Hansen, Founder · Last reviewed