Rent vs Buy Calculator 2025 – City-by-City Break‑Even Guide
Compare renting vs buying in 2025 by city. Estimate break‑even years, monthly costs, taxes, insurance, and maintenance. See when buying wins and when renting is smarter.
Rent vs Buy Calculator 2025 – City-by-City Break‑Even Guide
Introduction
Should you rent or buy in 2025? The right answer depends on your city, timeline, tax bracket, and maintenance costs. This guide explains how to analyze your numbers and determine your break‑even year—the point where buying becomes cheaper than renting.
Methodology and Key Inputs
To compare renting and buying, estimate these inputs:
- Home price and rent for similar properties
- Mortgage rate and loan term (e.g., 30‑year fixed)
- Down payment and closing costs
- Property taxes, insurance, HOA
- Maintenance and repairs (rule of thumb: 1–3% of home value annually)
- Expected rent growth vs home appreciation
- Time horizon (how long you’ll stay)
- Tax effects (mortgage interest/property tax deductions if itemizing)
The 5% Rule Shortcut
As a quick screen, assume buying costs ≈ 5% of home value per year (1% taxes + 1% insurance + 3% maintenance). If your annual rent is less than ~5% of the home’s value, renting can be competitive; if it’s more, buying may win sooner.
City Snapshots (Illustrative)
Assumptions: 20% down, 30‑year fixed, typical taxes/insurance.
New York City, NY
- $800,000 condo vs $3,800/mo rent
- 5% rule cost: ~$40,000/yr ($3,333/mo) before mortgage interest
- High HOA/maintenance extends break‑even; renting can be efficient for <5 years
Austin, TX
- $500,000 home vs $2,400/mo rent
- Lower property taxes than coastal CA but higher than many states
- Break‑even often ~5–7 years if appreciation is modest
Miami, FL
- $600,000 home vs $3,000/mo rent
- Insurance can be elevated (hurricane risk)
- Break‑even sensitive to insurance; shop carefully
Seattle, WA
- $700,000 home vs $3,100/mo rent
- No state income tax; property taxes moderate
- Tech job security favors longer horizons → buying can win ~6–8 years
Los Angeles, CA
- $900,000 home vs $3,600/mo rent
- Property taxes ~1% base; repairs/older homes vary widely
- Break‑even often longer unless rent growth is high
Detailed Comparison Framework
Buying Costs
- Down payment and closing costs (one‑time)
- Monthly mortgage principal + interest
- Property taxes and homeowners insurance
- HOA/condo fees (if any)
- Maintenance and capital expenditures
Renting Costs
- Monthly rent (subject to annual increases)
- Renter’s insurance (low)
- No maintenance/repair costs
Equity and Opportunity Cost
- Mortgage principal builds equity over time
- Down payment has an opportunity cost (foregone investment returns)
- Selling costs (agent fees 5–6%) at exit impact total cost of ownership
Example: 7‑Year Horizon
Inputs: $600k home, 20% down, 6.25% rate, $3k rent, 3% rent growth, 2% home appreciation, 1.2% taxes, $2k insurance, 1.5% maintenance.
- Renting total: Sum of rent over 7 years with increases
- Buying total: PITI + maintenance + opportunity cost − equity buildup
- Result: Break‑even around years 6–8 depending on appreciation and maintenance swings
Use our calculators to modify assumptions and see how quickly buying overtakes renting.
How to Use This with Our Tools
- Estimate your home budget with Mortgage Calculator
- Use Take‑Home Pay Calculator to confirm affordability
- Apply the 5% rule for your target city
- Compare 5‑, 7‑, and 10‑year scenarios
Try it now
- Mortgage Calculator: /calculator
- Take‑Home Pay Calculator: /calculator
- Explore All Calculators: /calculator
Tips to Improve the Buy Case
- Increase down payment to reduce PMI and monthly costs
- Shop 3–5 lenders; a 0.25% rate drop saves thousands
- Target low‑maintenance properties (newer build, fewer capital projects)
- Consider longer horizon before buying (≥7 years)
Tips to Improve the Rent Case
- Negotiate renewal; compare similar listings
- House‑hack (roommate) to offset rent
- Invest the down payment while you rent
FAQ
Q: Is the 5% rule accurate in 2025?
A: It’s a quick screen. Always refine with local tax, insurance, HOA, and maintenance.
Q: Do I get tax benefits when buying?
A: Only if you itemize and deductions exceed the standard deduction. Many do not.
Q: What if I move within 3–4 years?
A: Selling costs can erase gains—renting often wins for short horizons.
Related Calculators and Guides
- Mortgage Calculator – payments, amortization, extra principal
- Take‑Home Pay Calculator – budget accurately for housing
- Budget 50/30/20 vs Zero‑Based – align housing with goals
CTA: Get Your Personalized Buy vs Rent Snapshot
Open our calculators, plug in your city assumptions, and export a simple one‑page plan you can share with a lender or agent.