Rent vs Buy Calculator — California
California has low property tax thanks to Proposition 13, but among the highest home prices in the US. See your break-even years on real local numbers.
These are estimates using standard formulas (loan amortization and the common 28%/36% guideline). They are not financial or real-estate advice — confirm any number with a lender or broker.
How the numbers are calculated
The calculator totals the cash you would spend buying (down payment, about 3% closing costs, mortgage principal and interest, property tax, insurance, maintenance, and PMI) and subtracts the equity you build, then compares it to total rent minus what your down payment could have earned if invested. The break-even year is when buying pulls ahead of renting on your inputs.
California housing facts
California has Proposition 13, which caps annual assessed property-tax growth at 2%, so effective rates stay low (about 0.74%) even though home prices are among the highest in the US. Los Angeles and the Bay Area pull the statewide median near $850k. High prices are the main reason many Californians run the rent-vs-buy math.
Worked examples
Example: a $850,000 Bay Area home, 7-year stay
With 20% down at 6.5%, principal and interest on the $680,000 loan is about $4,298 a month. Property tax is only about $524 a month because Proposition 13 caps the effective rate near 0.74%, and insurance and maintenance add roughly $320. Total ownership runs near $5,142 a month. Renting the same home at $3,800 a month, the calculator shows buying pulls ahead around year 4 for a 7-year stay. Drop the rent toward $3,000 and the break-even stretches past year 9, because the high purchase price and closing costs make ownership costly until rents are high too.
Example: a $600,000 Inland Empire home, 5-year stay
A lower price means a smaller loan and a quicker equity build. At the same 6.5% rate the monthly ownership cost drops near $3,724, and with a $2,900 rent the break-even comes around year 4. The pattern holds: the cheaper the California home, the sooner buying pays off.
Why California favors a long hold
Proposition 13 limits how fast assessed value can rise, so even expensive homes carry a low effective tax rate. That helps owners, but the high purchase price means a large loan and slow early equity. The math therefore rewards buyers whose rent is high enough relative to the purchase price: at typical Bay Area rents buying can pull ahead within a few years, but at lower rents the break-even stretches well past a decade, so how long you stay still matters a great deal.
Proposition 13 and your tax bill
California’s Proposition 13 caps the base property-tax rate near 1% of assessed value and limits annual increases to 2% until the home is sold, when it reassesses near market value. The result is an effective rate around 0.74% statewide — far below states that tax closer to 2%. Enter that rate above to see how much it saves you each month.
When this calculator does not apply
Proposition 13 benefits long-time owners more than new buyers, who reassess at today’s high prices. It also does not cap special assessments or Mello-Roos districts, which can add to the bill in newer communities.
Data sources & last update
Tax rates and home prices are typical published values (Tax Foundation, FHFA, state revenue departments, Insurance Information Institute) and are examples updated for 2026. They are not a quote — confirm current figures with a lender or local assessor before acting. HomeMath runs entirely in your browser; nothing you type is uploaded.
Frequently asked questions
How does California Prop 13 affect the calculation?
Proposition 13 caps the effective property-tax rate near 0.74% and limits annual increases to 2% until sale. That low tax is why California ownership costs less per dollar of price than high-tax states, and the calculator uses it as the default tax input.
Why does high price matter more than tax in California?
Because the home price is so high, the loan and its interest dominate the monthly cost; the low tax helps but does not erase the size of the purchase. That is why a long hold is usually required for buying to beat renting.