On this page
Rent vs buy calculator
Compare the full cost of buying (mortgage, taxes, insurance, upkeep, closing and selling costs, minus the equity you keep) with renting, over the years you plan to stay.
More settings (taxes, upkeep, growth)
Renting vs buying in 2026: the numbers
The national figures this fall make the gap easy to see. Home prices are near record highs, and mortgage rates sit well above where they were a year ago.
| Item | Figure | Data date |
|---|---|---|
| Median existing-home price | $417,500 | Sep 2026 |
| 30-year fixed mortgage rate | 7.40% | Oct 15, 2026 |
| 15-year fixed mortgage rate | 6.71% | Oct 15, 2026 |
| Median asking rent, top 50 metros | $1,694 | Sep 2026 |
| Median rent, 2-bedroom | $1,890 | Sep 2026 |
| Average property tax rate | 0.90% of value | 2025 |
Sources: NAR, Oct 2026; Freddie Mac PMMS, Oct 2026; Realtor.com, Oct 2026; ATTOM, Apr 2026.
The median home price rose 1.3% from a year earlier, while median rent slipped 0.4%. Mortgage rates moved the most: the 30-year average was 6.27% a year ago and is 7.40% now, according to Freddie Mac.
Monthly cost of owning vs renting
Here is what the median home costs each month with a 20% down payment and a 30-year fixed loan at 7.40%. This is the same math our rent vs buy calculator above runs with your inputs.
| Monthly cost | Owning a $417,500 home | Renting |
|---|---|---|
| Mortgage principal and interest | $2,313 | n/a |
| Property tax (0.90%) | $313 | n/a |
| Home insurance | Varies by state | Renters insurance |
| Rent | n/a | $1,694 |
| Total | ~$2,626 + insurance | ~$1,694 + renters insurance |
Source: our calculation using NAR, Freddie Mac, ATTOM and Realtor.com figures, Oct 2026. Repairs, HOA fees and PMI are not included.
Before insurance, that is a gap of roughly $930 a month (our calculation), and homeowners insurance usually costs more than a renters policy. At the year-ago rate of 6.27%, principal and interest on the same loan would be about $2,061, or roughly $250 less each month.
Not all of the owner’s payment is a cost, though. In the first year of this loan, about $3,140 goes to principal, which you keep as equity, and about $24,610 goes to interest (our calculation).
Upfront cash: the part renters skip
Buying needs a large sum on day one.
| Upfront cost | Median home example |
|---|---|
| Down payment (20%) | $83,500 |
| Closing costs (2% to 5% of the loan) | $6,680-$16,700 |
| Moving, inspection, repairs | Varies |
Sources: Bankrate (closing cost range), Jul 2026; our calculation on NAR’s median price.
A renter usually pays a security deposit and first month’s rent instead. The renter can also invest the money a buyer puts into the down payment, which is why a fair comparison should count what that cash could earn. A home inspection is another cost to plan for before you buy.
How to use the rent vs buy calculator
The calculator at the top of this page lets you swap the national medians for your own numbers. To get a useful answer:
- Use a real listing price. Pick a home you would actually buy, not the national median.
- Enter the rent for a similar home. Compare a three-bedroom house with a three-bedroom rental, not with your current studio.
- Use a rate quote if you have one. Freddie Mac’s 7.40% average assumes good to excellent credit and 20% down. A smaller down payment or a lower score usually means a higher rate.
- Add your local property tax. The national average is 0.90% of value, but your county’s rate can be far higher or lower.
- Be honest about how long you will stay. This is often the single biggest factor in the result.
Run a few versions. If buying only wins when every assumption goes your way, renting may be the safer choice for now.
The price-to-rent ratio
A quick way to judge a market is the price-to-rent ratio: home price divided by a full year of rent for a similar home. Rocket Mortgage describes these rough bands:
- Below 15: buying is usually the better deal.
- 15 to 21: fairly balanced, either can work.
- Above 21: renting is usually more affordable.
Using national medians, $417,500 divided by $20,328 a year of rent gives a ratio of about 20.5 (our calculation). That sits at the top of the balanced range. In expensive coastal metros the ratio is often higher, and in many Midwest and Southern towns it is lower, so run it with local prices.
What tips the decision
- How long you stay. Closing costs and the early, interest-heavy years of a mortgage make short stays expensive. The longer you own, the more principal you pay down and the more time prices have to rise.
- Your mortgage rate. Each percentage point changes the payment by hundreds of dollars a month on a typical loan.
- Property tax where you live. ATTOM puts the national average effective rate at 0.90%, but it ranges from 0.33% in Hawaii to 1.84% in Illinois.
- Maintenance. Owners pay for every repair, from a new water heater to a new roof. Renters do not.
- Utilities. A house is usually bigger than an apartment. Check our guide to the average utility bill to see what to add.
Is buying worth it right now?
It depends less on the national averages and more on your timeline, your savings and local prices. If you plan to move within a few years, or buying would drain your savings, renting is often the lower-risk choice. If you expect to stay for many years and the monthly cost fits your budget, buying lets you build equity that rent never will.
Before you shop, see how much house you can afford at today’s rates, and keep a separate emergency fund so a repair does not land on a credit card.
See how we research every number on our method page, browse more budgeting guides, or try all our calculators.
Common questions
Is it cheaper to rent or buy a house in 2026?
For a typical home, renting is cheaper month to month right now. Our calculation puts the mortgage and property tax on a $417,500 median home at about $2,626 a month with 20% down at 7.40%, before insurance, compared with median asking rent of $1,694 in the 50 largest metros. Buying can still come out ahead over many years because part of each payment builds equity.
What is a good price-to-rent ratio?
Divide the home price by a year of rent for a similar home. Rocket Mortgage describes a ratio below 15 as favoring buying, 15 to 21 as roughly balanced, and above 21 as favoring renting. At national medians, the ratio is about 20.5 (our calculation).
How much are closing costs when you buy a home?
Bankrate says closing costs typically run 2% to 5% of the loan amount. On a $334,000 loan, that is about $6,680 to $16,700 (our calculation), paid on top of your down payment.
What mortgage rate does the Freddie Mac average assume?
The PMMS tracks conventional, conforming purchase loans for borrowers with good to excellent credit who put 20% down. Your own rate can be higher or lower depending on credit, down payment and loan type.
Sources
Every number above comes from these pages. We list the date each page showed when we checked it.
- Freddie Mac, Primary Mortgage Market Survey (PMMS)
- National Association of Realtors, Existing-Home Sales Increased 1.5% in September
- Realtor.com September 2026 Rental Report (via PR Newswire on Finviz)
- ATTOM, 2025 Property Tax Analysis
- Bankrate, Closing Costs
- Rocket Mortgage, Price-to-Rent Ratio Explained
Estimates are for general information only. Get written quotes from licensed local pros before you decide.
- Passed Level II of the CFA® Program
- Canadian Securities Course (CSC)
- Conduct and Practices Handbook (CPH)
Sepehr Parsa is a financial planner and the founder and editor of DollarMap. He has passed Level II of the CFA Program and completed the Canadian Securities Course (CSC) and the Conduct and Practices Handbook (CPH) course. He writes and edits our guides on cars, home repairs, budgeting, saving and investing, and checks that every number has a source.
“In a slowing economy, a budget is what keeps you afloat.”
How we check every number
