5/1 ARM vs. 30-yr fixed?

5/1 lower rate but rate-resets after 5 years. ARM helps if you expect to move/refi within 5-7 years.

Mortgage interest + property tax deductible if itemized. Standard deduction $14,600 (2025 single) often wins.

Down <20%: ~0.5-1% of loan/year until 20% equity. Adds $1500-3000/yr to ownership cost.

1-2% of home value/yr is realistic. Older homes: higher. New construction: lower (warranty period).

Buy vs Rent Breakeven Years

Years until total ownership cost (mortgage + property tax + maintenance + opportunity) equals total rent.

Result

Breakeven at year 4

~4 years

After year 4, buying cheaper.

Home price$400,000
Down payment$80,000
Loan$320,000
Monthly mortgage$2,129
Annual property tax$4,800
Annual maint+insurance$6,000
Equivalent rent$2,000/mo
Breakeven year4
Year 5 buy total$123,077
Year 5 rent total$127,419
Year 10 buy total$227,378
Year 10 rent total$275,133

Step-by-step

Annual ownership cost = mortgage + property tax + maintenance + opp cost − appreciation.
Compare cumulative buy vs cumulative rent (3% rent inflation).
Cross at year 4.

How to use this calculator

Enter home price + financing terms.
Enter equivalent rent cost.
Adjust appreciation + opportunity rate.

About this calculator

Buy vs. rent breakeven: years to recoup the up-front cost of buying through avoiding rent + building equity + appreciation. Typical US: 5-7 years. Faster appreciation (6%+/yr) shortens breakeven; high mortgage rates lengthen it. Always include opportunity cost on down payment (could be invested at 7%/yr S&P 500). Don't buy if you might move within 3 years — closing costs dominate.