After the aggressive rate hikes of 2022–2023, mortgage rates have moderated but remain well above the historic lows of the pandemic era. In early 2026, a 30-year fixed rate sits in the range of 6.2–6.9% for well-qualified buyers — down from the 7.5–8% peaks of late 2023, but far from the sub-3% rates that made the pandemic housing boom possible.
This matters because the monthly payment on a $500,000 mortgage at 6.5% is roughly $3,160/month in principal and interest alone. At 3%, that same mortgage costs about $2,108/month — a gap of over $1,000 that directly affects the rent-vs-buy calculation.
The standard "should I buy?" framing asks whether monthly ownership costs beat rent. But this misses the point. What you really need to ask is: at what point does my equity growth outweigh the extra costs of buying?
Buying involves large upfront costs — down payment, closing costs (typically 2–4% of the purchase price), and the opportunity cost of that capital. A renter who keeps their down payment invested can compound it over the years they continue renting.
A clean way to compare the two paths is the net wealth model: at any point in time, how much wealth has the buyer accumulated versus the renter? The break-even point is where the buyer's equity (minus cumulative payments) crosses above the renter's investment portfolio (minus cumulative rent).
| Scenario | Break-Even (est.) | Who Wins at Year 10 |
|---|---|---|
| $500k home, 20% down, 6.5%, $2,500 rent | ~4–5 years | Buyer (modest lead) |
| $800k home, 10% down, 6.5%, $2,800 rent | ~8–10 years | Roughly equal |
| $1M+ home, 20% down, 6.5%, $3,500 rent | 15+ years | Renter (if investing savings) |
These are rough estimates. Your numbers will vary based on local appreciation, rent growth, and what returns you could realistically earn on invested savings.
A few trends have shifted the calculation compared to 2022–2024:
Transaction costs (agent fees, closing costs, moving) are substantial. If you plan to stay fewer than 4 years, renting is almost always financially superior — you won't accumulate enough equity to recover the upfront costs.
A 20% down payment on a $600,000 home is $120,000. That capital, left invested in a diversified portfolio, could compound meaningfully over 10 years. Renting is not throwing money away — you're paying for housing and retaining optionality over your capital.
National averages mask enormous local variation. A mid-tier city where rents are high relative to prices may offer a 3-year break-even. A coastal city with a price-to-rent ratio of 30+ may never reach break-even in a 10-year window at current rates.
Plug in your home price, down payment, rent, and timeline to see your personal break-even point.
2026 is not an obviously bad time to buy, but it's also not the slam-dunk that low-rate environments created. The math is closer than it looks on either side. For buyers with strong down payments, long time horizons, and in markets where rents are high relative to incomes, buying can still make good long-run financial sense.
For everyone else, renting and investing the difference remains a completely rational strategy — especially in a world where investment returns on a diversified portfolio can compound at 7–9% over time.
The best answer is the one specific to your numbers, your city, and your financial situation. Use the calculator above to find yours.