Rent vs Buy Calculator

How to use this calculator

1. Enter the Home price, Down payment, Mortgage rate and Loan term.
2. Add Ownership costs per year (tax, insurance, maintenance as a share of the price).
3. Enter your Monthly rent, Rent increase per year, Home price growth per year and Investment return per year.
4. Set Years you plan to stay and read which side ends ahead, with a year-by-year table.

How the comparison is built

Both paths start with the same cash. The buyer spends the down payment and 3% closing costs; the renter invests that same amount. Each month, whichever path has the lower housing cost invests the difference, so both are spending the same total.

Buyer net worth = Value × 0.94 − Loan balance + Invested surplus

• Value = price grown at the annual price growth rate
• 0.94 = value after 6% selling costs
• Loan balance = what you still owe after the years you stay
• Invested surplus = rent savings invested at the investment return

At the end of your stay the buyer's net worth is the sale price less 6% selling costs, less the remaining mortgage, plus any invested savings. The renter's is the investment portfolio.

Example: $400,000 home vs $2,000 rent

With 20% down at 6.5% over 30 years, 2% yearly ownership costs, 3% rent and price growth and a 6% investment return, the mortgage payment is $2,023 a month. After 10 years renting comes out ahead by about $16,464 (buy $234,029, rent $250,493).

Stay 5 years and renting leads by about $30,076. Stay 20 years and buying wins by roughly $50,172 ($511,941 vs $461,769). The longer you stay, the more closing and selling costs are spread out and the more principal you repay.

What moves the answer

Time horizon matters most, followed by the price-to-rent ratio and the return you could earn on the money you do not put into a house. If prices fall or rents are low relative to prices, renting tends to win; if rents rise quickly and you stay long, buying tends to win.

Change one input at a time. Then check what you can afford on the home affordability calculator and see what the loan really costs on the mortgage calculator.

Beyond the numbers

• Owning gives control over the space and stability from a fixed payment, but ties up cash and makes moving costly.
• Renting gives flexibility, but rent can rise and you have no say over the property.
• The renter's advantage depends on actually investing the difference every month.
• Maintenance is lumpy: a roof or boiler can cost far more than the yearly average.

Assumptions and limits

Fixed rate, constant growth and returns, 3% closing and 6% selling costs. The tool ignores income taxes, mortgage interest deductions, investment taxes, mortgage insurance and the chance of selling at a loss in a downturn. Real markets are not smooth.

Treat the result as a way to see which assumptions matter, not a forecast. For a major decision, speak to a financial adviser.

Frequently asked questions