Rent vs Buy Calculator — USA
Compare renting vs buying in USA over your time horizon and see which comes out ahead. Free, no signup.
Should you rent or buy in the USA?
In the US, the up-front cost of buying is dominated by two items the calculator's "Buy net cost" already folds in: your down payment and the closing costs you pay on top of it. The Consumer Financial Protection Bureau (CFPB) puts typical closing costs at roughly 2% to 5% of the home's purchase price, not including the down payment — on a $350,000 home that's commonly $7,000–$17,500 for the appraisal, title insurance, lender's origination fee, recording fees and other line items on your Closing Disclosure (CFPB, accessed 24 September 2026). Buying also builds equity and benefits from price growth, and it exposes you to property tax and maintenance every year you own; renting avoids those but builds no equity and is exposed to rent increases instead. The calculator nets all of this — down payment, mortgage payments, maintenance and the mortgage balance still owed if you sell before the loan is paid off — against the home's value after growth, and compares it with total rent paid, to show which wins over your time horizon.
What makes buying vs renting different in the USA
Financing and PMI. If your down payment is below 20% of the purchase price on a conventional loan, the CFPB confirms lenders generally require private mortgage insurance (PMI), an extra monthly cost that protects the lender — not you — until you build enough equity (CFPB, accessed 24 September 2026). A 20%+ down payment, as used in the calculator's default, avoids this cost entirely.
Property tax varies by county, not just by state. Unlike a single national rate, US property tax is set locally, and the Tax Foundation's county-level data shows effective rates differ substantially even between neighbouring counties in the same state (Tax Foundation, accessed 24 September 2026). Always check your specific county assessor's rate rather than assuming a national average.
Tax treatment of owning. If you itemize deductions, the IRS allows a deduction for mortgage interest on up to $750,000 of acquisition debt ($375,000 if married filing separately) for a home bought after 15 December 2017 (IRS Topic 505, accessed 24 September 2026). Property tax is deductible too, but as of the 2025 tax year it shares a combined $40,000 State and Local Tax (SALT) cap ($20,000 if married filing separately) with state and local income or sales tax, subject to an income-based phase-down that does not reduce the deduction below $10,000 (IRS Topic 503, accessed 24 September 2026). Renters get no equivalent deduction.
Renter protections are set state by state. There's no single national security-deposit law: nearly every US state (and some cities) sets its own rules on how much a landlord can collect as a deposit, how it must be held, and the deadline for returning it after move-out, so what applies to you depends on where you rent (Nolo, accessed 24 September 2026).
Illustrative USA cost comparison
| Cost item | Buying | Renting |
|---|---|---|
| Upfront cash | Down payment + closing costs (~2–5% of price, CFPB) | Usually a security deposit (state-set limit) |
| Financing extra | PMI if down payment < 20% (CFPB) | None |
| Annual local tax | Property tax — rate set per county (Tax Foundation) | Usually included in rent |
| Federal tax treatment | Mortgage interest + property tax deductible if itemizing, subject to the $750k debt cap and $40k SALT cap (IRS) | No equivalent deduction |
| Legal protections | n/a | Deposit limits and return deadlines set by state law |
Illustrative only — enter your own numbers in the calculator above. Sources for each row are listed under "Sources" below.
Frequently Asked Questions
Is it better to rent or buy in USA?
It depends on how long you'll stay, price growth, rent increases and your mortgage rate. Short stays usually favour renting; longer stays often favour buying. The calculator gives a clear answer for your numbers.
How much are closing costs in the USA?
The CFPB says closing costs typically run 2% to 5% of the home purchase price, not including the down payment, covering items like the appraisal, title insurance, origination fees and recording fees.
Do I have to pay PMI if I put down less than 20%?
On most conventional loans, yes. The CFPB explains that private mortgage insurance (PMI) is generally required once a conventional loan's down payment is below 20% of the purchase price, and it protects the lender, not the borrower.
Can I deduct mortgage interest and property tax?
If you itemize, the IRS allows mortgage interest on up to $750,000 of acquisition debt ($375,000 if married filing separately) for loans taken out after 15 December 2017. State and local taxes, including property tax, are capped at a combined $40,000 SALT deduction ($20,000 if married filing separately), subject to an income phase-down, as of the 2025 tax year.
Does property tax vary a lot by county?
Yes. The Tax Foundation's county-level data shows effective property tax rates differ substantially even within the same state, so the same purchase price can carry a very different annual tax bill depending on the county.
Sources
- CFPB — typical closing costs of 2%–5% of purchase price (accessed 24 September 2026)
- CFPB — private mortgage insurance (PMI) below 20% down (accessed 24 September 2026)
- IRS Topic 505 — home mortgage interest deduction limits (accessed 24 September 2026)
- IRS Topic 503 — $40,000 SALT deduction cap (accessed 24 September 2026)
- Tax Foundation — property taxes by state and county (accessed 24 September 2026)
- Nolo — security deposit limits and deadlines vary by state (accessed 24 September 2026)