Rent vs. Buy Calculator

What this rent vs. buy calculator does

Renting vs. buying isn't just "rent payment vs. mortgage payment" — buying involves a down payment, closing costs, property tax, insurance, maintenance, and eventual selling costs, while renting frees up that down payment money to be invested elsewhere. This calculator runs both scenarios side by side using an opportunity-cost model: it tracks total cash spent on each path, nets out the home equity you'd build (for buying) or the investment growth on your savings (for renting), and shows you which one actually comes out ahead over your chosen time horizon — plus the specific year buying starts to pay off, if it does.

How to use it

• Fill in the Buying section: home price, down payment percentage, mortgage rate and term, property tax, insurance, HOA fees, maintenance, closing costs, expected appreciation, and selling costs when you eventually sell.
• Fill in the Renting section: monthly rent, how much rent typically rises each year, and renter's insurance.
• Set the investment return rate you'd expect if you invested the money you saved by renting instead of buying, and choose how many years you want to compare.
• Read the headline verdict, the year buying breaks even (if it does within your window), and the full year-by-year table below.

Why the "opportunity cost" of the down payment matters

A lot of simpler rent-vs-buy comparisons just add up monthly payments and stop there, which quietly assumes the money in a down payment is worth nothing if you don't buy. In reality, a renter who doesn't spend $80,000 on a down payment can invest that money instead. This calculator credits the renting scenario with realistic investment growth on both the initial down payment amount and any month where renting costs less than buying would have — which is what makes the comparison fair.

Common use cases

• Deciding whether to buy now or keep renting and save for a bigger down payment.
• Figuring out how long you'd need to stay in a home for buying to actually pay off versus renting and investing.
• Comparing two different cities or neighborhoods with very different price-to-rent ratios.
• Stress-testing the decision against different mortgage rates or appreciation assumptions.

Frequently asked questions

What does "breakeven year" mean?

It's the first year in the comparison where the net cost of buying (total cash spent minus your home equity) drops below the net cost of renting (total rent paid minus your invested savings). Before that year, renting comes out ahead financially; after it, buying does.

Why would renting ever beat buying if rent always goes up?

Because the money you didn't spend on a down payment, closing costs, property tax, insurance, and maintenance keeps compounding in an investment account the whole time. If your assumed investment return is meaningfully higher than home appreciation, renting can stay ahead for a long time, especially over shorter time horizons.

What's a realistic maintenance percentage to use?

1% of the home's value per year is a commonly used rule of thumb for ongoing repairs and upkeep, which is why it's the default here — older homes or homes needing near-term work may run higher.

Does this account for mortgage interest tax deductions?

No, this calculator keeps things straightforward by not factoring in taxes on either side, since tax situations vary a lot by country, state, and individual circumstances. Treat the result as a pre-tax financial comparison.

Can I use this outside the US?

Yes — every field is just a number or percentage, so it works with any currency or country's typical costs. Just make sure your property tax, insurance, and closing cost assumptions reflect your local market.