Rent vs buy: after how many years does buying win?
$2,000 rent vs a $300,000 home with 10% down at 7%: renting wins for the first five years, and buying pulls ahead in year 6. By year 10 the buyer is $62,818 ahead; by year 15, $198,490. The early years belong to the renter because buying front-loads the costs.
Break-even horizon · wealth comparison · free, always
$2,000 rent vs $300,000 home, 10% down =
Year 6 break-even
Renting wins years 1–5. Buying wins from year 6 on.
7% mortgage · rent +3%/yr · home +4%/yr · renter invests the difference at 7%
| Year | Buyer net | Renter net | Leader |
|---|---|---|---|
| 3 | −$42,369 | −$22,306 | Renter by $20,063 |
| 5 | −$69,088 | −$62,267 | Renter by $6,821 |
| 6 | −$81,282 | −$83,975 | Buyer by $2,693 |
| 10 | −$121,323 | −$184,141 | Buyer by $62,818 |
| 15 | −$148,072 | −$346,562 | Buyer by $198,490 |
Your numbers, your break-even
Why buying rarely wins early
Buying front-loads its costs and back-loads its gains. Closing costs (2–5%) and selling costs (~6%) are paid in full even if you stay two years; the mortgage's early payments are mostly interest; and appreciation needs time to compound past the transaction toll. That is the 4–8 year rule of thumb in one paragraph: the break-even lives where cumulative equity finally outweighs the round-trip costs, here in year 6.
Renting is not throwing money away
The renter's column in the table is not zero: it is the down payment invested at 7% plus every month the rent came in under the owner's cost, also invested. $30,000 invested for 15 years at 7% is about $82,000; with the monthly differences added, the renter's invested wealth is real money, just slower than equity plus appreciation after the crossover. The comparison is wealth vs wealth, not wealth vs nothing, which is why the honest answer has a year attached instead of a slogan.
The hidden costs that flip the answer
Maintenance (1–2% of the home's value per year), property tax and insurance, PMI below 20% down, and HOA dues all sit inside the owner's monthly cost above. Raise maintenance to 2% or add a $300 HOA and the break-even slides right by a year or two. Buying wins on the base case; the fine print decides by how much.
Estimates, not financial or real-estate advice. Assumes constant rates, rents, appreciation, and investment returns, which real markets never deliver. Talk to a licensed professional before acting.
Common questions
Is it better to rent or buy?
It depends on how long you stay. On the example above ($2,000 rent vs $300,000 home, 10% down), renting wins for five years and buying wins from year 6. Short stays favor renting; long stays favor buying.
How many years until buying a house is worth it?
The rule of thumb is 4–8 years, set by closing costs (2–5%), selling costs (~6%), and how fast equity builds. Enter your numbers above for your break-even.
Is renting throwing money away?
No. The renter in this comparison invests the down payment and every month's savings vs owning; it is wealth vs wealth, not wealth vs nothing.
What hidden costs of buying do people miss?
Maintenance (1–2% of value per year), property tax, insurance, PMI below 20% down, and HOA dues. Together they can move the break-even by years.
Does a bigger down payment change the break-even?
Yes: more down means less interest and no PMI, which pulls the break-even earlier, but it also means more cash not invested elsewhere.
Next from the ledger
Rent on a $60,000 salary: what rent your salary supports
How much to afford $2,000 rent: the income behind the rent in this comparison
House down payment calculator: saving the down payment this math assumes