Rent vs. Buy Calculator
Find out whether renting or buying a home saves more money over your chosen time horizon. Enter your home price, mortgage rate, rent, and investment return for an instant side-by-side breakdown. Free, no sign-up, nothing leaves your browser.
$80,000
per year
per month (0 if none)
of home price annually
annual return if investing
Assumptions: 3% buy-side closing costs, 6% selling costs. The renter invests the down payment and monthly savings at the stated investment return. Taxes, PMI, and home improvement costs are excluded.
Monthly Buy Cost
$2,944
P&I $2,086 + costs
Monthly Rent
$2,000
+3%/yr increase
Break-Even Year
Beyond 10 yrs
renting stays cheaper
Advantage at Year 10
$237.2K
renting saves more
Renting saves $237.2K over 10 years
Renting and investing the difference outperforms buying over 10 years with these assumptions.
Net buy cost: $213.3K · Net rent cost: -$23.8K
Year-by-Year Breakdown
Results are estimates for informational purposes only and do not constitute financial or investment advice. Consult a qualified adviser before making real estate decisions.
How It Works
Enter your home details
Fill in the home price, down payment, mortgage rate, term, property tax, insurance, HOA, maintenance, and expected annual appreciation.
Enter your rent and investment details
Enter the monthly rent you would pay, expected annual rent increases, and the investment return you'd expect if you invested the down payment in the market instead.
Set your time horizon
Drag the slider to how many years you plan to stay. Short horizons (1–5 years) strongly favour renting; longer horizons give buying more time to build equity.
Read the results instantly
See the all-in monthly buy cost, your monthly rent, break-even year, and net dollar advantage at your horizon — plus an optional full year-by-year table.
How to Use the Rent vs. Buy Calculator
- Enter the home price and down payment percentage — the calculator automatically shows the dollar amount of your down payment.
- Set the mortgage rate and loan term (15-year or 30-year). A 30-year term lowers monthly payments but costs more in total interest.
- Fill in the ongoing ownership costs: property tax rate (typically 0.5–2.5% per year depending on your state), home insurance, HOA fee (enter 0 if none), maintenance rate (1–2% of home value per year is a common rule of thumb), and annual home appreciation.
- Enter the current monthly rent you'd pay, the expected annual rent increase, and the investment return rate — the annual return you'd earn by investing the down payment in the market instead of using it to buy.
- Drag the time horizon slider to the number of years you expect to stay. Results update instantly.
- Expand the year-by-year table to see exactly how the two paths compare each year, and spot the break-even point.
Understanding the Results
| Result | What it means |
|---|---|
| Monthly Buy Cost | All-in monthly cost of owning: mortgage P&I + property tax + insurance + HOA + maintenance. This is what leaves your account every month as a homeowner. |
| Monthly Rent | Your current monthly rent. This figure grows at the annual rent increase rate each year in the model. |
| Break-Even Year | The first year in which buying's net cumulative cost dips below renting's. Before this year, renting is cheaper; after it, buying is cheaper. |
| Net Advantage at Horizon | The dollar difference between the two paths at your chosen time horizon. Larger = more decisively one path wins. |
| Buy Net Cost | Total cash paid out (down + closing + all monthly costs) minus home equity at the end minus selling costs. This is the true cost of buying. |
| Rent Net Cost | Total rent paid minus the investment value of the down payment (and any monthly savings). This is the true cost of renting. |
How the Model Works
The calculator runs a year-by-year simulation using standard financial formulae:
- Monthly P&I: calculated using the standard amortisation formula
M = P × r(1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments. - Remaining loan balance: calculated at each year-end using the standard formula, so home equity reflects actual principal paydown — not just appreciation.
- Buy net cost: cumulative payments + upfront costs − home equity (appreciation − remaining balance) + selling costs (6% of home value).
- Rent net cost: cumulative rent paid − investment value (the down payment and monthly savings compounded at the stated investment return rate).
- Closing costs: assumed at 3% of home price (buy side only). Selling costs assumed at 6% of home value.
Why the Time Horizon Matters So Much
Buying involves large upfront costs — the down payment, closing costs, and the interest-heavy early mortgage payments. These costs take years to offset via equity accumulation. If you sell after 2–3 years, you are unlikely to recoup the transaction costs, making renting the clear winner for short stays.
Over longer horizons (10+ years), the picture changes. Equity builds as the mortgage is paid down, the home appreciates, and rents rise — eroding the renter's monthly advantage. Meanwhile, the renter's invested portfolio competes with the homeowner's equity; the result depends heavily on home appreciation versus market returns.
As a rule of thumb: if you plan to stay for fewer than 5 years, renting is usually cheaper. If you plan to stay 7+ years, buying often becomes competitive or superior — especially in markets with moderate home price growth and high rent inflation.
What Is Not Included
- Mortgage interest tax deduction: US homeowners who itemise deductions can deduct mortgage interest, which reduces the true cost of buying. This is excluded to keep the model simple and universally applicable.
- Capital gains tax exemption: Most US homeowners can exclude up to $250,000 ($500,000 married) of capital gains on a primary home sale — a significant tax benefit not reflected here.
- PMI (private mortgage insurance): If your down payment is under 20%, lenders typically require PMI, adding 0.5–1.5% of the loan amount per year to your monthly costs.
- Home improvement costs: Major renovations are separate from maintenance and are not modelled.
- State and local income tax effects: Property tax deductibility and other state-specific rules vary widely.
Features
- Your data stays private: All calculations run entirely in your browser — nothing is uploaded to or stored on any server.
- No account required: Open the page and start calculating immediately.
- Real-time results: All outputs update instantly as you type or drag the slider — no button to press.
- Pre-filled defaults: The calculator starts with typical US values so you see results immediately on load.
- Full year-by-year table: See every year's monthly rent, buy net cost, rent net cost, and which path wins.
- Adjustable horizon: Slider runs from 1 to 30 years — see how the break-even year shifts as you change it.
Results are estimates for informational purposes only and do not constitute financial or investment advice. Actual outcomes depend on market conditions, tax rules, and individual circumstances. Consult a qualified mortgage professional or financial adviser before making a home-buying decision.
Frequently Asked Questions
Is my financial data stored or shared?
No. All calculations happen entirely in your browser using JavaScript. The home price, rent, and other figures you enter are never sent to or stored on any server.
What does "net cost" mean in the rent vs. buy comparison?
Net cost is total cash paid out minus financial benefits received. For buying: all payments and upfront costs minus the home equity you'd realise on sale (after selling costs). For renting: total rent paid minus the investment value of the down payment and any monthly savings.
What is the break-even year?
The first year buying's cumulative net cost falls below renting's net cost. Before this year, renting is cheaper overall; after it, buying is. A shorter time horizon almost always favours renting because the upfront buying costs haven't been offset yet.
What investment return should I use?
The long-run average annual return of a diversified US stock index fund is roughly 7% after inflation. Use 5–6% for a mixed portfolio. The higher the return, the more favourably renting looks — try a range to see how sensitive the result is to this assumption.
Does the calculator include the mortgage interest tax deduction?
No. The model is simplified and excludes the mortgage interest deduction, capital gains tax exemption on home sale, PMI, and state-specific tax effects. These can meaningfully favour buying and should be considered separately.
Why does my break-even year change when I adjust the investment return?
The investment return directly affects how fast the renter's portfolio grows. A higher return makes the renter's invested down payment compound faster, pushing the break-even year later (or off the 30-year horizon). A lower return — or a 0% return — makes buying become competitive much sooner.
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