Rent vs Buy Calculator
See whether renting or buying a home costs you less over your planned time horizon, after equity, appreciation and rent increases.
Example
A $400,000 home with 20% down ($80,000), a 6.5% 30-year mortgage, 1.1% property tax, 1% maintenance, $120/mo insurance and 3% appreciation, compared to renting at $2,000/mo with 3% annual increases and a 4% investment return on your down payment, over 7 years:
Monthly principal & interest is $2,022.62. Net cost to buy works out to about $159,244 (after $134,000+ of equity), while net cost to rent is about $156,097. Renting is cheaper by roughly $3,100 over this 7-year window — but buying wins if you stay longer or appreciation runs higher.
How it works
Enter the home price, your mortgage terms, ownership costs and rent details. The tool amortizes the loan, projects home value and rent growth, nets out equity and the opportunity cost of your down payment, then tells you which option is cheaper over your chosen number of years.
Good to know
The Rent vs Buy Calculator estimates the total net cost of owning a home versus renting one over a time horizon you choose, then names the cheaper option. It models the full picture on both sides: the down payment and closing costs, monthly principal and interest from an amortized loan, property tax, maintenance, insurance and HOA, home appreciation, and the equity you recover after selling costs when you sell. On the rent side it tracks rising rent and treats the money you did not tie up in a down payment as invested, crediting its growth as an opportunity gain.
It is built for anyone weighing whether to keep renting or commit to a purchase, especially when you are unsure how long you will stay. Because the verdict swings heavily on your time horizon, the most useful way to use it is to run the same inputs at several different "years to compare" values, for example 3, 7, and 15 years, and watch where the cheaper option flips. That flip is your break-even point in plain numbers.
To read the result, focus on the three headline figures: net cost to buy, net cost to rent, and the amount you save with the winner. The buy figure already subtracts the equity you would walk away with at sale, so a high purchase cost is not automatically bad if equity is large. The cash breakdown table shows exactly where the buying money goes, which helps you see whether interest, carrying costs, or transaction fees are driving the outcome.
One caveat worth keeping in mind: the model deliberately omits mortgage-interest and property-tax income deductions, and it assumes you only invest the down payment rather than every dollar of monthly savings. If renting is genuinely cheaper month to month, your real renting advantage could be larger than shown. Adjust the appreciation, rent-increase, and investment-return inputs conservatively, since small changes to these rates can move the verdict more than the home price itself.
Frequently asked questions
Why can buying still cost more even though I build equity?
Equity is subtracted from your buying cost, but interest, property tax, maintenance, insurance, closing and selling costs are real money out the door. Over short horizons these often exceed your equity gain, so renting wins until appreciation and principal paydown catch up — usually after several years (the classic break-even point).
What is the 'investment return' input for?
If you rent, the cash you would have spent on a down payment and closing costs stays invested. This field estimates the growth on that money, which is subtracted from your renting cost as an opportunity gain. Set it to 0 to ignore this benefit and compare pure cash outflows.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser; nothing is uploaded.
Is this financial advice?
No. These are educational estimates — consult a qualified financial professional before making decisions.
People also ask
How many years do you usually need to own a home to break even versus renting?
It varies widely with price, mortgage rate, appreciation, and transaction costs, but break-even commonly lands somewhere in the range of about three to seven years in many scenarios. The calculator pinpoints it for your specific numbers when you test different time horizons.
Does this calculator account for mortgage interest tax deductions?
No. The tool's note states it ignores income-tax deductions, so it does not reduce the buying cost for any mortgage-interest or property-tax write-offs you might claim. If those deductions apply to you, the real cost of buying could be lower than the figure shown.
What costs are included when buying a home in this comparison?
It includes the down payment and closing costs, total mortgage interest, property tax, maintenance, home insurance, and HOA dues, then subtracts the equity you keep after selling costs. The cash breakdown table itemizes each of these so you can see what drives the total.
Is buying always cheaper than renting in the long run?
Not necessarily. Buying tends to win over longer horizons as principal paydown and appreciation accumulate, but high mortgage rates, low or negative appreciation, heavy maintenance, or a strong investment return on the money you would have used as a down payment can keep renting cheaper for many years.
How does home appreciation affect whether renting or buying wins?
Higher assumed appreciation raises the home's value at sale and the equity you recover, which lowers the net cost of buying and pushes the verdict toward owning. Because the outcome is sensitive to this rate, it is worth testing both optimistic and conservative appreciation figures.
What selling cost percentage should I use for a home sale?
Selling costs such as agent commissions, transfer taxes, and other fees often total roughly five to six percent of the sale price in many markets, which is why the calculator defaults to 6 percent. Your actual figure depends on your location and negotiated terms.
Why does a larger down payment change the rent-versus-buy outcome?
A larger down payment lowers the loan balance and total interest, but it also ties up more cash that could otherwise stay invested. The calculator captures both effects, so a bigger down payment can help or hurt the comparison depending on your assumed investment return.
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