Rent vs Buy Calculator
Renting or buying — which leaves you wealthier after the years you will actually stay?
Rent vs buy comparisons usually cheat: they compare rent with a mortgage payment and ignore everything else. This one compares the only thing that finally matters — your net worth at the end of the stay, on both paths.
How to use
- Enter the home price, down payment and mortgage terms for the buying path.
- Enter the rent for a similar home and how long you realistically expect to stay.
- Review the assumptions — appreciation, rent growth, investment return, tax, maintenance, closing and selling costs. Every one is editable.
- Click "Compare" for the year-by-year net-worth race and the break-even year.
About this tool
The buyer's net worth is home equity: the appreciated value minus the remaining mortgage and the cost of selling. The renter's net worth is an investment account that starts with the down payment and closing costs the buyer spent, and receives the monthly difference whenever owning costs more than rent. Same household cash flow, two different buckets.
Short stays favor renting because buying's upfront costs (closing, then selling) need years to amortize. Long stays usually favor buying. The break-even year in the results is where the lines cross — try your own assumptions, especially a lower appreciation rate, before trusting any verdict.
How it works
Both paths are simulated month by month. Buying: the loan amortizes at the mortgage rate while the home value compounds at the appreciation rate; monthly ownership cost is principal + interest + property tax + insurance + maintenance. Renting: rent compounds at the rent-growth rate, and the renter invests the buyer's upfront cash (down payment + closing costs) plus each month's cost difference at the investment return.
At any year, buy net worth = home value − mortgage balance − selling costs; rent net worth = the investment account balance. The break-even year is the first year-end where buy ≥ rent.
Worked examples
Reading the default result: A $425,000 home with 20% down at 6.6% costs about $2,171/month in principal and interest alone, plus tax, insurance and maintenance — roughly $3,070/month all-in against $2,300 rent. The renter invests the $97,750 upfront difference plus about $770/month, so renting leads early; buying needs appreciation and principal paydown to catch up, which on these defaults happens only if you stay long enough.
Frequently asked questions
Why does the renter get an investment account?
Because a fair comparison must give both households the same income and the same total housing budget. The renter spends less up front and often less per month; that difference has to go somewhere, and investing it is the honest benchmark.
What if renting costs more per month than owning?
Then the monthly difference flows the other way — the model subtracts it from the renter's account, exactly as it would from a real savings balance.
Are taxes on the home and rent counted?
Property tax is counted on the buying side. Income tax effects (mortgage interest deduction, capital gains on investments) are not modeled — they depend heavily on your bracket and would need a tax tool, not an estimate.
What appreciation rate should I use?
US home prices have averaged roughly 3–4% a year over long periods, close to inflation plus a little. Using 5%+ flatters buying; using your actual local market history is better than any national average.
Is my data sent anywhere?
No. Every calculation runs in your browser. Nothing you type ever leaves your device.
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