The Rent vs Buy tool got a meaningful update this week. Until now, it only compared the first year of renting versus owning. That is useful, but it misses the bigger question most people actually have: when does buying start to make sense?
What changed
The tool now runs a full projection across the entire loan term -- year by year. It tracks cumulative rent paid versus cumulative ownership costs (net of the equity you build), and finds the exact year where buying catches up. Or, if it never does, it tells you that too.
There are three new pieces:
- Annual Rent Increase: a new input that lets you set how much your rent goes up each year. The default is 3%, which is roughly the national average right now. A fixed mortgage payment stays the same while rent keeps climbing -- this is the core reason buying becomes a hedge over time.
- Break-even callout: a clear statement right in the results that says “Break-even occurs in Year X” or “Renting stays cheaper for the entire term.” No guessing.
- Projection chart: a line chart with two lines -- cumulative rent in blue, cumulative ownership in amber. Where they cross is your break-even point, marked with a green dot. You can also switch to a Table tab to see the exact numbers for every year.
Why it matters
Most people look at monthly payment alone and think renting is obviously cheaper. And in year one, it usually is. But rent goes up every year, and as your mortgage ages, more of each payment goes toward equity instead of interest. The gap closes. Sometimes it flips. Sometimes it does not.
The point is not to push anyone toward buying or renting. It is to show the full picture so you can make the decision with your eyes open. A $600 rent today becomes $1,414 in 30 years at 3% annual increases. That is not hypothetical -- that is math.
A few things the model handles
PMI automatically drops off in the projection once your loan-to-value ratio hits 80%. Closing costs are applied as a lump sum in year one (not spread across the term like in the monthly view), because that is how you actually pay them. Opportunity cost on your down payment is calculated every year. The projection is honest about what it does not include -- home appreciation, tax deductions, and HOA fees are not modeled.
Everything still runs locally in your browser. No accounts, no data sent anywhere.
Try the updated Rent vs Buy tool and see where your numbers land.