Buying: your down payment and closing costs, then every year’s loan payment, property tax, insurance and upkeep (plus mortgage insurance if you put down less than 20%). When you sell, the calculator subtracts what you still owe and your selling costs, and counts what’s left as money back in your pocket. It also adds the growth you could have earned if you had kept your upfront cash in savings instead.
Renting: your total rent over the same years, with the yearly increase you choose.
Break-even: the first year when buying costs less than renting, and stays that way. A short stay usually favors renting, because closing and selling costs take years to pay back.
What it leaves out: tax deductions, what you would do with any monthly savings if one option is cheaper, and the things money can’t measure, like stability, freedom to remodel, or flexibility to move.
Thinking about buying? See my first-time buyer guide, check whether South Dakota’s Give Me Five program could help with your down payment, or use the monthly payment calculator.