Rent vs Buy Calculator
Compare the true cost of renting vs buying a home over your time horizon. Includes mortgage, taxes, maintenance, equity buildup, and rent increases.
$
$
$
%
yrs
%
%
Buying Cost vs Renting (over period)
—
Total Rent Paid —
Total Net Buying Cost —
Home Equity Built —
Better Financial Choice —
Extended More scenarios, charts & detailed breakdown ▾
$
$
$
%
Better Choice
—
Total Rent Paid —
Net Buying Cost —
Savings Amount —
Professional Full parameters & maximum detail ▾
$
%
$
$
%
%
%
%
%
%
%
Renting Costs
Total Rent Paid —
Buying Costs
Monthly Mortgage (P&I) —
Total Mortgage Paid —
Total Other Ownership Costs —
Home Equity Built —
Net Buying Cost (Total − Equity) —
Comparison
Rent vs Buy Difference —
Opportunity Cost (Down Payment Invested) —
Price-to-Rent Ratio —
Financial Recommendation —
How to Use This Calculator
- Enter your current or expected Monthly Rent.
- Enter the Home Purchase Price and Down Payment.
- Enter the Mortgage Interest Rate and how many Years you plan to stay.
- Expand More Options to adjust home appreciation and rent increase assumptions.
- See the total cost comparison and which option is financially better for your timeline.
Formula
Total Renting Cost = Sum of rent payments over period
Total Buying Cost = Down Payment + Closing Costs + Mortgage Payments + Taxes + Insurance + Maintenance − Equity Built
Home Equity = Future Home Value − Remaining Loan Balance
Example
Example: $2,000/month rent vs $400,000 home, $80,000 down, 6.8% rate, 7 years.
- Total Rent Paid (7 yrs): ~$161,400
- Monthly Mortgage: $2,091 P&I
- Home Equity Built: ~$136,000
- Net Buying Cost: ~$147,000
- Advantage: Buying saves ~$14,400 over 7 years
Frequently Asked Questions
- Not always. Buying typically wins if you stay 5+ years, home values appreciate, and you can afford 20% down. Renting wins if you move frequently, home prices are very high relative to rents, or you invest the down payment difference.
- Price-to-rent ratio = Home Price ÷ Annual Rent. Under 15 = buying typically favors, 15–20 = neutral, above 20 = renting often makes more sense. San Francisco (40+) and New York City (30+) often favor renting; Midwest cities (12–16) often favor buying.
- Beyond the mortgage: property taxes (~1.1% of value/year), homeowners insurance (~0.3%), maintenance (~1% of value/year), HOA fees, closing costs (2–5%), PMI if under 20% down. Total "true cost" of ownership can be 1.5–2× the mortgage payment.
- Typically 4–7 years, due to closing costs (2–5%) and slow equity buildup in early years when most payments go to interest. The "break-even" period depends on local price-to-rent ratios and expected appreciation.
- Historically yes, through equity buildup and appreciation. US homes appreciated ~3.5–4% annually over the long run, beating inflation. However, stocks have historically outperformed real estate on a total return basis — the down payment invested in index funds might grow more.
Related Calculators
Sources & References (5) ▾
- CFPB — Is Renting or Buying Better for Me? — Consumer Financial Protection Bureau
- HUD — Renting vs. Buying a Home — U.S. Department of Housing and Urban Development
- Federal Reserve — Housing Affordability Data — Federal Reserve
- IRS Publication 530 — Tax Information for Homeowners — Internal Revenue Service
- Census Bureau — American Housing Survey — U.S. Census Bureau