Rent vs buy calculator for millennials comparing renting and homeownership with breakeven year, rent inflation, and home appreciation
Rent vs Buy Calculator for Millennials
Compares the true cost of renting vs buying over your timeline, including rent inflation, home appreciation, and a simple equity model (principal paydown + appreciation).
Millennial reality check: This tool is cash-flow aware (PMI, HOA, maintenance). If your timeline is short or flexibility is key, renting often “wins” even when owning builds equity.
Renting
Tip: If you typically pay a deposit, application fees, or broker fees, include them as “Upfront Move-In Costs.”
Buying
Notes: “Closing Costs” are paid at purchase. “Selling Costs” are estimated transaction costs when you sell.
Rent vs Buy FAQ
What does “breakeven year” mean?
It’s the first year where owning becomes cheaper than renting based on the method you chose: Cash Outflow or Net Cost (Cash – Equity).
Does this include equity?
Yes—if you select Net Cost (Cash – Equity). Equity is estimated as principal paydown plus home appreciation, minus estimated selling costs.
Why can renting “win” even if home values rise?
Short timelines, high transaction costs, PMI, HOA fees, and maintenance can outweigh early equity—especially if you move in 3–5 years.
Is this financial advice?
No. This is an educational estimate. Real results vary by taxes, insurance, repairs, market conditions, and loan terms.
Disclaimer: This calculator provides educational estimates only and does not constitute financial, tax, or investment advice. Assumptions are simplified and may not reflect your actual situation.
RC
Mobility matters (especially for millennials)
If you’re likely to relocate for work, family, relationships, or lifestyle—your timeline is the whole game. Buying can build equity, but transaction costs, PMI, maintenance, and “moving sooner than expected” can wipe out the advantage. Use this calculator to test short timelines (3–5 years) and longer timelines (7–10+ years) and compare the breakeven year.
Quick tip: If you might move within 5 years, pay extra attention to selling costs and maintenance. They’re the most common “surprise” line items that shift the result.
Exploding the myths: “Housing is impossible now”
Before you decide that buying is “dead,” it helps to separate viral narratives from real math. Your situation may be better (or worse) than the headlines—especially when you factor in interest rates, down payments, and your expected timeline.
Pair it with the calculator above: you’ll get a clearer view of rent inflation vs ownership costs and where the breakeven point may land.
Want the narrative version (not just numbers)?
This article walks through the real-life tradeoffs behind rent vs buy—cash flow, flexibility, and how to think about timing your move. It’s a great companion piece to the calculator when you’re weighing your next step.
If you’re comparing cities, consider adding your likely move timeline into the calculator and rerun it for 3, 5, and 10 years. That small change often flips the result.