Comparing a mortgage payment with rent is the most common way people decide to buy, and it is the comparison most likely to mislead — in both directions. The payment is only part of what owning costs, and neither number says who ends up wealthier. On our model’s default scenario ($420,000 home, 20% down at 6.5%, $2,100 rent), the payment and the rent are almost identical, the full cost of owning is about 45% higher than renting, and buying still loses over ten years unless a comparable rental costs more than about $2,468 a month. Below: the three comparisons, in the order you should make them.
Is a mortgage payment cheaper than rent? Often — and it is the wrong test
Often, yes: the principal-and-interest payment on the default home is $2,124 a month against $2,115 for rent plus renter’s insurance, a near tie that many buyers read as “the same money, but I keep the house.” The full cost of owning is a different number. Add property tax, insurance and maintenance — $943 a month on the default home — and owning costs about $3,067 a month all in, roughly $950 more than renting. That gap is what the budget has to carry, and it is the money the renter in our model invests every month. Payment-against-rent misses it entirely; the tool above shows both lines so it cannot be missed.
What mortgage payment equals my rent?
It depends on which cost you mean. At 6.5% with 20% down, a principal-and-interest payment of $2,100 a month buys a home of about $415,300. If you want the full monthly cost of owning to match a $2,100 rent — tax, insurance and maintenance included — the price falls to about $277,900. That gap between the two prices is the size of the mistake in “my mortgage would be the same as my rent,” and it is why buyers who shop on the payment end up house-poor: the payment fit, the ownership did not.
What is the rent at which buying beats renting, by price?
The tipping-point rent, and it is neither the payment nor the full cost. It is the monthly rent for a comparable home above which buying ends a ten-year stay with more net worth than renting and investing the difference — equity, appreciation, selling costs and taxes all counted. At 6.5%, 20% down, on the model’s default assumptions:
| Home price | P&I payment | Owning, all in | Rent at which buying wins |
|---|---|---|---|
| $300,000 | $1,517 | $2,250 | $1,818 |
| $350,000 | $1,770 | $2,591 | $2,089 |
| $420,000 | $2,124 | $3,067 | $2,468 |
| $500,000 | $2,528 | $3,612 | $2,901 |
| $600,000 | $3,034 | $4,292 | $3,443 |
| $700,000 | $3,540 | $4,973 | $3,985 |
Read across a row: the rent that makes buying win sits between the payment and the full cost, because the owner gets something back for part of the difference — principal repaid and appreciation on the whole home — but not for all of it. Compare your rent with the last column, not the first.
How does the rate change the payment and the full cost?
By about $110 a month per half point on the default loan, and the full cost moves by the same amount, because tax, insurance and maintenance do not care what the mortgage costs:
| Mortgage rate | P&I payment | Owning, all in |
|---|---|---|
| 5.0% | $1,804 | $2,747 |
| 5.5% | $1,908 | $2,851 |
| 6.0% | $2,014 | $2,958 |
| 6.5% | $2,124 | $3,067 |
| 7.0% | $2,235 | $3,179 |
| 7.5% | $2,349 | $3,293 |
A lower rate does more than trim the payment: it lowers the rent at which buying wins, from $2,468 at 6.5% to $2,350 at 6% and $2,117 at 5%, which is why the verdict can flip on a rate move even when the monthly comparison barely changes. Rent vs. buy in 2026 has the full ladder from 4% to 8%.
Should I rent or own a home, then?
Rent if a comparable rental costs less than the tipping rent for your price and rate, own if it costs more — and decide on that line, not on the payment. The main guide walks through the three numbers behind it; if you are weighing whether to buy now or wait a year, that bet is priced too. The tool above and the full calculator run the same engine, so the tipping rent you see here is the one the verdict uses.