About & methodology
Breakeven Home helps you see what a home really costs, and what would change the answer. The calculators count everything (interest, taxes, insurance, upkeep, selling costs, and what your money could have earned elsewhere), then show how sure the answer is.
It's built and run by an independent developer. It's free, there's no sign-up, and it isn't affiliated with any lender, real estate agent, or financial company. Nobody pays to change the results.
How the numbers work
Monthly cost
Your fixed-rate loan payment, plus mortgage insurance, property tax, home insurance, maintenance, and HOA fees. Conventional mortgage insurance (PMI) drops off once your loan is 80% of the home's current value; FHA mortgage insurance and the VA funding fee follow their own rules.
Tax savings
We compare itemizing your mortgage interest and property tax (with the federal cap on state and local tax deductions) against the standard deduction, and count only the extra savings, at the tax rates you enter. Many buyers get little or no benefit, because the standard deduction is larger.
Rent vs. buy
Both sides spend the same amount each month. Whichever side's housing costs less that month invests the difference at your expected investment return, so the down payment and closing costs count as money a renter keeps invested from day one. Investment gains are taxed at your capital gains rate (gains only, never the money you put in). The buyer's net worth is the home's sale price after selling costs, minus what's left on the loan, plus anything the buyer invested. Both are compared after the number of years you plan to stay.
Net cost of owning
Everything you pay that doesn't become equity (interest, mortgage insurance, property tax, insurance, maintenance, HOA fees, closing and selling costs), minus the home's appreciation and your tax savings. The down payment and principal aren't costs: they come back to you as equity when you sell.
Comparing options
The down payment, side-by-side, and pay-extra calculators use the same idea: every option gets the same monthly budget, and whatever an option doesn't spend is invested. The winner is the option that leaves you with the most net worth.
Refinancing
We compare keeping your current loan with the new one: the new payment, interest, closing costs, and how long you'll stay. The home's value, taxes, and insurance are the same either way, so they're left out.
Odds and tipping points
Odds. Nobody knows how home prices and markets will move, so we rerun your analysis across 300 simulated futures. Each year, home prices and investment returns vary around the rates you expect: home prices by about 6% in a typical year, with some momentum (bad years tend to follow bad years), and investments by about 18%, roughly like a broad stock index. The same inputs always give the same odds. This is a simplified model: it isn't fitted to historical data, and it doesn't capture long shifts like a decade of unusually high rates.
Tipping points. For one assumption at a time (rent, home price growth, investment return, how long you stay, and so on), we find the value at which the answer would flip, holding everything else as you entered it.
Data and default assumptions
Location data comes from the U.S. Census Bureau's American Community Survey (Census 2023): each state's median home value, rent, and property taxes. From those we get the effective property tax rate (taxes ÷ home value) and the price-to-rent ratio (home value ÷ a year's rent). Without a state, we use national figures: 0.9% property tax and homes selling for about 20.2× a year's rent. Rent estimates are based on a state's typical home, so they can be far off for a home that's much more or less expensive. Enter your actual rent when you can.
Every default below can be changed in the calculator forms:
- Home price growth: 3% a year
- Investment return: 6% a year
- Rent increase: 3% a year
- Interest rate: 6.5%
- Property tax: your state's rate (or the national rate)
- Maintenance: 1% of the home's value a year
- Home insurance: 0.5% of the price a year
- PMI: 1% of the loan a year
- Selling costs: 6% of the sale price
- Capital gains tax: 15%
What it doesn't cover
- Fixed-rate loans only; adjustable-rate mortgages aren't modeled.
- Taxes are simplified: a flat state rate, approximate state standard deductions, a single capital gains rate, and no tax on the gain when you sell the home (most primary-home sales qualify for the federal exclusion).
- Refinancing is modeled for conventional loans.
- Home insurance uses a national rule of thumb, not your state's rates.
- Amounts are in future dollars, not adjusted for inflation.
Results are estimates for education, not advice. See our terms of use and privacy policy.