Rent vs Buy Calculator United States — Tax Year 2025
Compare renting vs buying over the long term — which actually costs less? For United States. Uses current Tax Year 2025 data.
$
The property you're considering buying
$
Your initial down payment
$
What you'd pay to rent a comparable home
Common questions — United States
At what point does buying become better than renting?
The "break-even" horizon depends on the price-to-rent ratio and appreciation. In Mumbai where prices are very high relative to rents, the break-even can be 15–20 years. In Pune or Hyderabad, 5–8 years. The longer you plan to stay, the stronger the case for buying.
What is the price-to-rent ratio?
Property value ÷ Annual rent. A ratio of 10–15x (rent pays back in 10–15 years) suggests buying is reasonable. 20–25x suggests renting may be better. Mumbai often has ratios of 30–40x in premium areas — meaning rent is very cheap relative to ownership costs.
Why does opportunity cost matter?
The down payment you use for a house could instead be invested in equity mutual funds returning 10–12%. This "lost" investment return is the opportunity cost of buying. Over 20 years, ₹20 lakh invested at 12% becomes ₹1.93 crore — that's significant.
What costs are usually ignored when buying?
Stamp duty and registration (4–8% of property value), interior work, maintenance (typically 1–2% of value annually for older buildings), society charges, property tax, and insurance. These add up to ₹1–2 lakh/year for a mid-range apartment — often forgotten in the EMI comparison.
Is real estate always a good investment?
No. In major Indian cities, the best performers have been well-located properties with good infrastructure connectivity. Peripheral areas and developer townships have often underperformed or remained illiquid. Real estate returns are highly location-specific.