Am I Ready to Buy a House? Five Numbers That Answer It

Ready is five numbers: about $96,600 of cash for a $420,000 home at 20% down, $3,067 a month to own it, a stay past break-even, and rent above the tipping point.

Written by Jonathan Nyst Updated September 2026 5 min read How it works Every figure re-runnable

You are ready to buy a house when five numbers say so, and none of them is your age, your lease renewal or how tired you are of a landlord. On our model’s default home — $420,000, 20% down, a 6.5% mortgage — they are: about $96,600 of cash to close; a monthly cost of owning of about $3,067 against about $2,115 for renting a comparable place; a planned stay long enough to reach the break-even year, which at a $2,800 rent is year 5 and at a $2,100 rent never arrives; a comparable rent above the tipping point of about $2,468 a month; and enough left after closing to absorb the model’s $4,200-a-year maintenance line without borrowing. Here is how to find each of yours.

How much money should I save to buy a house?

The down payment plus closing costs — and closing costs are the part people forget. Our model prices them at 3% of the purchase price (a default you can change), so at 20% down the cash to close is 23% of the price; at 10% down it is 13%, plus private mortgage insurance every month until the loan falls to 80% of the original price. The model’s figures:

Two honest notes on the table. First, a smaller down payment is not cheating: it gets you in for less cash, and how PMI actually ends shows the insurance stops on a schedule you can compute. But the monthly cost rises with it — on the $420,000 home, $3,067 a month at 20% down becomes $3,522 at 10% and $3,665 at 5%, PMI included. Second, “saved” means saved after you have kept the reserve in the last section. A closing that empties the account is the setup for the worst year of home ownership, not the start of a good one.

What will owning cost every month, honestly?

More than the mortgage payment, by about half. The principal and interest on the default home is $2,124 a month; property tax, insurance and maintenance add another $943, for $3,067 all in. The comparable rent column, with renter’s insurance, is $2,115. That gap of roughly $950 a month is not a reason not to buy — the owner is also building equity and the model counts every dollar of it — but it is the number your budget has to carry, and it is the number lenders’ payment estimates leave out.

If the all-in cost only works on the good months, you are not ready yet; the mortgage vs rent calculator shows the full monthly line for your own price and rate, and the price at which the whole cost of owning, not just the payment, matches your rent.

How long do I need to stay?

Past the break-even year, or the transaction costs win. Buying starts about 9% of the home’s value behind — roughly 3% to get in and 6% to get out, as what selling a house really costs itemizes — and needs years of equity and appreciation to earn that back. At the default $2,100 rent, it never does within fifteen years; renting stays ahead by about $44,000 over a 3-year stay, $49,000 over 5, $67,000 over 10 and $97,000 over 15. At a $2,800 rent, where buying wins, the crossover is year 5, and a 3-year stay still leaves buying about $16,000 behind:

“Ready” therefore includes a plan: a job, a relationship, a city you expect to keep for longer than the break-even year, with some margin. If a move inside three years is a real possibility, the table says rent, whatever the rest of your finances look like.

Is my rent above the tipping point?

This is the number that decides whether buying is even the winning move, and most readiness checklists never mention it. At a 6.5% mortgage the model’s tipping-point rent is about $2,468 a month on a $420,000 home — buying only beats renting-and-investing when a comparable rental costs more than that. Below it, being ready to buy does not make buying right; you would be ready for a decision that loses money. The threshold moves with the rate — rent vs. buy in 2026 has it at every rung from 4% to 8% — and with the price, which is why the metro table gives a different answer in Cleveland than in San Jose.

Can I absorb a bad year?

Only you can answer this one, but the model gives you the scale. It charges maintenance at 1% of the home’s value a year — $4,200 on the default home — as a smoothed average. Real houses do not bill smoothly: a roof, a furnace or a foundation repair arrives in one invoice, often in the first two years, when your equity is smallest and the closing has just drained your cash. Being ready means that invoice would be inconvenient rather than catastrophic. If it would go on a credit card, the honest sequence is another year of renting and saving, and the buy now or wait guide shows that year is free when renting is winning at your numbers, and cheap even when it is not.

The five-question readiness check

Answer each with your own numbers, not the defaults:

1. Cash to close — do I have the down payment plus about 3% closing costs, and a reserve left over?
2. Monthly cost — can I carry the full cost of owning (payment, tax, insurance, maintenance, any HOA), not just the payment, on an ordinary month?
3. Stay — will I plausibly be in this home past the break-even year for my scenario, with margin?
4. Tipping rent — is a comparable rental more expensive than the tipping-point rent for my price and rate?
5. Bad year — could I pay a $10,000 repair in year one without borrowing?

Five yeses and buying is a defensible financial decision. Four is a conversation. Fewer, and the right move is the one that costs nothing: keep renting, keep investing the difference, and re-run the numbers when one of them changes.

Run your own numbers

Open the calculator with your real price, rent and quoted rate, then try it at 10% down to see what a smaller down payment does to the monthly line, and at a 3-year stay to see what an early exit costs. Every figure above is computed by the open-source engine documented on the methodology page, including the PMI schedule and the break-even years, and each one is guarded by an automated test so it cannot drift from what the calculator shows.

Jonathan Nyst

Jonathan Nyst built RentVsBuyMath as an independent project — for himself first. He spent fifteen years marketing financial products, in banking, fintech and payments at CMO level, which is exactly how he knows what a lead-generation calculator looks like from the inside. This is the calculator without the funnel: he is not a lender, broker or agent, the site takes no referral fees, and nobody is paid more if you decide to buy. The whole model is public — every formula documented on the methodology page, the engine MIT-licensed, covered by automated tests including scenarios computed by hand to check it.

Drafted with AI from the engine's output; reviewed and published by Jonathan Nyst. How this site is made · Corrections