Should You Rent or Buy?
Compare the true cost of renting versus buying over time. Factor in equity growth, opportunity cost, and your local market to find the smarter financial move.
How the Rent vs Buy Calculator Works
The rent vs buy decision is more than just comparing a mortgage payment to monthly rent. Our calculator models both scenarios over your chosen time horizon, accounting for the opportunity cost of capital— the returns a renter could earn by investing their down payment and monthly savings in the stock market instead of tying them up in a home.
On the buying side, the tool tracks mortgage payments, property taxes, and maintenance costs, while crediting you with home equitythat grows through both principal paydown and annual appreciation. On the renting side, it compounds the difference in monthly costs at your chosen investment return rate, building a hypothetical portfolio that represents the renter's alternative wealth.
The break-even pointis the year when the buyer's net wealth (home equity minus total costs) overtakes the renter's net wealth (investment portfolio minus total rent paid). A shorter break-even period favours buying; a longer one suggests renting may be the better short-term strategy. Adjust the inputs to match your Southern California market and personal financial situation for the most accurate comparison.