Rent vs Buy Calculator

Compare the full cost of renting and buying a home over the years you plan to stay. The rent vs buy calculator counts equity, investment returns, and selling costs.

Updated
Runs in your browser. Your data is not uploaded.
Buying

Renting

Over the period
–

Estimate only. Not financial advice.

How to use the Rent vs Buy Calculator

  1. Fill in the Buying section: price, down payment, mortgage rate, taxes, upkeep, and expected home value growth.
  2. Fill in the Renting section, and set how many Years to compare.
  3. Press Calculate. You see which option costs less and by how much, the break-even year, and a chart of both over time.

How it works

net cost of buying = down payment + buying costs + mortgage payments
                    + property tax + maintenance + insurance
                    − (home value − remaining loan − selling costs)
net cost of renting = all rent paid
                    − investment gain on the down payment, buying costs,
                      and each month's difference in outgoings

The model runs month by month. Home value and rent grow once a year at your rates. The break-even year is the first year buying is cheaper.

Examples

  • $400,000 home with 20% down at 6.5%, 1.1% tax, 1% upkeep, 3% growth, against $2,000 rent rising 3% a year with a 5% return: after 10 years buying costs $213,299 net and renting $191,629, so renting comes out about $21,670 ahead.

Why the answer changes with time

Buying has large costs at both ends: closing costs to get in and agent fees to get out. Over a short stay these usually tip the result toward renting. The longer you stay, the more of each payment turns into equity and the more home value growth counts, so buying tends to win in the long run.

Limitations

  • Tax deductions and capital gains rules differ by country and are not included.
  • Returns and home prices are assumed to grow steadily. Real markets go up and down.
  • Assumes the renter really invests the money a buyer would spend.

Frequently asked questions

Is it better to rent or buy?

It depends on how long you stay, local prices, and rates. Buying usually wins over longer periods; renting often wins over a few years.

What is the break-even year?

The first year in which the net cost of buying drops below the net cost of renting.

Why does the calculator include investment returns?

Because a renter can invest the down payment. Leaving that out would make buying look better than it is.

Often used together with the Rent vs Buy Calculator.