Rent vs Buy Calculator
Evaluate whether buying a home or continuing to rent makes greater financial sense for your timeline. By modeling down payments, mortgage interest, property taxes, maintenance costs, home price appreciation, and compounding rent inflation, this tool provides an objective financial verdict.
Market listing price of target purchase property
Percentage of home price funded with upfront cash
30-year fixed loan interest rate
How long you plan to occupy this property before moving or selling
Cost to rent a comparable apartment or single-family home
Projected average annual long-term home value growth
Expected annual percentage increase in rental lease renewals
Total dollar benefit of buying over renting (positive = buying wins)
How to Use This Calculator
- Enter target home purchase price and your planned down payment percentage.
- Enter current mortgage interest rate for a 30-year loan.
- Set your anticipated residency duration in years.
- Enter rent for a comparable home along with expected rent inflation.
- Review the breakeven threshold and net dollar advantage.
Formula & Calculation Methodology
Compares cumulative rental payments against the net cost of homeownership. Homeownership costs include mortgage payments, property taxes, maintenance, and insurance, offset by home equity accrued through principal repayment and price appreciation.
Worked Example
$400,000 home with 20% down at 6.5% interest vs $2,400/month rent over 10 years
Frequently Asked Questions
Why does the length of stay heavily favor buying over time?↓
Buying carries significant upfront closing costs (2% to 5%) and early mortgage payments consist mostly of interest. Over 5 to 10+ years, principal reduction accelerates and property price appreciation compounds, overcoming initial transaction frictions.
How does the calculator factor in routine home maintenance and repairs?↓
The engine includes the standard real estate "1% rule," setting aside 1% of the total property value each year for roof maintenance, HVAC servicing, plumbing, and structural upkeep.
When is renting financially smarter than buying?↓
Renting is frequently superior when you plan to relocate within 2 to 4 years, when local mortgage payments substantially exceed comparable rents, or when home prices face near-term downside volatility.
What limitation should I know about investment opportunity cost?↓
This calculator models direct cash flow and property appreciation. It does not model alternative investment returns you could earn by investing the down payment in stock index funds instead of home equity.
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Open calculator →Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.