Rent vs Buy Calculator
Rent vs buy calculators compare total costs of renting versus buying a home over time. Buying costs: mortgage payment, property tax, insurance, maintenance (1-2% annually), closing costs. Renting costs: monthly rent, renter insurance. Break-even typically occurs at 5-7 years. For example, a $300,000 home with 20% down at 6% interest costs $1,799/month mortgage plus $500 property tax/insurance = $2,299 vs $2,000 rent. Factor in home appreciation (3-5% annually), tax deductions, and opportunity cost of down payment.
Compare the financial impact of renting versus buying a home. Calculate monthly costs, break-even point, and net worth difference over 10 and 30 years. Accounts for mortgage, property tax, insurance, HOA, maintenance, home appreciation, rent increases, and investment opportunity cost.
Buying Inputs
Renting Inputs
Investment Assumption
Expected annual return if you invested the down payment and monthly savings instead of buying.
How to Use
- Enter your value in the input field
- Click the Calculate/Convert button
- Copy the result to your clipboard
Frequently Asked Questions
- How does a rent vs buy calculator work?
- A rent vs buy calculator compares the total financial impact of renting versus buying a home over time. It factors in mortgage payments, property taxes, insurance, maintenance, and home appreciation for buying, versus rent payments, rent increases, and investment returns on the money you would have used for a down payment. The result shows which option leaves you with a higher net worth.
- What is the break-even point for buying a home?
- The break-even point is the number of years it takes for the financial benefits of buying (equity buildup and home appreciation) to exceed the costs of buying versus renting and investing the difference. Typical break-even periods range from 3 to 7 years depending on home prices, interest rates, rent levels, and investment returns. If you plan to move before the break-even point, renting may be better financially.
- What is opportunity cost in the rent vs buy decision?
- Opportunity cost refers to the investment returns you could earn if you invested your down payment and monthly savings (the difference between buying and renting costs) in the stock market or other investments instead of tying it up in a home. A common assumption is 7% annual returns (historical S&P 500 average). Higher opportunity cost rates make renting more attractive.
- Is it always better to buy than rent?
- No. Whether buying or renting is better depends on many factors: home prices, interest rates, how long you plan to stay, rent levels, investment returns, property taxes, and maintenance costs. In expensive markets with low rent-to-price ratios, renting and investing can outperform buying. In cheaper markets or with low interest rates, buying often wins. Use a calculator to compare with your specific numbers.
- What costs are included in homeownership?
- Homeownership costs include mortgage principal and interest, property taxes (typically 0.5-2.5% of home value per year), homeowner's insurance, HOA fees if applicable, maintenance and repairs (typically 1-2% of home value per year), and potentially PMI if your down payment is less than 20%. These ongoing costs often exceed the mortgage payment alone.
- How does home appreciation affect the rent vs buy decision?
- Home appreciation is one of the biggest factors favoring buying. The US historical average is about 3-4% per year, though this varies widely by location and time period. Higher appreciation rates make buying more attractive because your equity grows faster. However, appreciation is not guaranteed — home values can decline, especially in the short term.