Rent vs Buy Calculator

Compare the financial outcomes of renting vs buying a home over time. Accounts for appreciation, investment returns, taxes, and maintenance.

Financial Disclaimer

This calculator is for educational purposes only and does not constitute financial advice. Results are estimates based on the inputs provided. Consult a qualified financial advisor before making investment or financial planning decisions.

Better Option

Renting

Inputs

Home Price

Down Payment

Mortgage Rate

Loan Term

years

Monthly Rent

Time Horizon

years

Comparison

Advantage Amount

$10,329.00

Monthly Mortgage (P&I)

$2,022.62

Monthly Rent

$2,000.00

Buy: Net Wealth

$266,283.00

Rent: Net Wealth

$276,612.00

Future Home Value

$537,567.00

Total Buy Cost

$438,596.00

Total Rent Cost

$275,133.00

How to Use This Calculator

Enter the Home Price you're considering and your Down Payment percentage.
Set the Mortgage Rate and Loan Term from your lender.
Enter your current or expected Monthly Rent.
Set the Time Horizon for how long you plan to stay.
Expand advanced options to fine-tune appreciation, taxes, insurance, and investment return assumptions.
Review the recommendation, wealth comparison chart, and total costs to make an informed decision.

What each input means

Home Price: Total purchase price of the home you're considering.
Down Payment: Percentage of home price paid upfront. 20% avoids PMI.
Mortgage Rate: Annual mortgage interest rate. Check current rates with your lender.
Loan Term: Length of the mortgage. Common terms are 15 or 30 years.
Monthly Rent: What you're currently paying or would pay in rent.
Time Horizon: How many years you plan to stay. Buying favors longer horizons.
Home Appreciation: Expected annual home value increase. US historical average is ~3-4%.
Property Tax Rate: Annual property tax as % of home value. US average is ~1.1%.
Annual Insurance: Annual homeowner's insurance premium.
Maintenance: Annual maintenance as % of home value.
Annual Rent Increase: Expected yearly rent increase. National average is ~3-5%.
Investment Return: Return if you invest the down payment and monthly savings instead.

How this is calculated

Formula

Compares net wealth from buying (home equity) vs renting (invested savings) over a given time period, factoring in appreciation, maintenance, taxes, insurance, and investment returns.

Worked example, using the default values

Identify Input Parameters
4 parameters
Home Price = 400000, Down Payment = 20, Mortgage Rate = 6.5, Loan Term = 30 = 12 input(s) provided
Calculate Better Option
Renting = Renting
Calculate Advantage Amount
10329 = $10,329
Calculate Monthly Mortgage
2022.62 = $2,022.62