Rent vs Buy Calculator — Renting vs Buying: Which Is Better for You?
Compare the true financial outcome of renting versus buying a home over a specific time period.
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Your Results
Buying Wins After 7 Years
Buying by $27,345
Buy: $155,808 · Rent: $128,463
Net Wealth Comparison
| Monthly Mortgage P&I | $2,076 |
| Monthly Rent | $2,200 |
| Future Home Value | $526,373 |
| Home Equity at Sale | $235,853 |
| Buy Net Wealth | $155,808 |
| Rent Net Wealth | $128,463 |
| Advantage | Buying wins by $27,345 |
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How This Calculator Works
Buy Net Wealth = Future Home Equity − Selling Costs − Opportunity Cost of Down Payment
Rent Net Wealth = Invested Down Payment + Invested Monthly Savings
Opportunity cost = what your down payment would have earned in the stock market. Selling costs = ~6% agent fees.
Frequently Asked Questions
Buy if: planning to stay 5+ years, home prices reasonable vs rent (price-to-rent ratio <20), stable income, and you have 20% down. Rent if: high price-to-rent ratio or uncertain timeline.
Annual cost of owning ≈ 5% of home value (3% unrecoverable cost of capital + 1% property tax + 1% maintenance). Divide by 12 for monthly. If monthly rent is less, renting wins.
Price ÷ Annual Rent. Above 25: renting often cheaper. Below 15: buying generally better. Between 15-25: depends on personal factors. High-cost cities often run 30-40+.
No — in high price-to-rent markets, investing the down payment and rent savings can outperform homeownership. The "rent vs buy" decision is genuinely situation-dependent.
Buying hidden costs: maintenance (1%), property tax, insurance, HOA, transaction costs (5-10%). Renting hidden costs: security deposit opportunity cost, no equity, rent increases.
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Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.