Rent vs Buy Calculator

Renting versus buying is not just rent against a mortgage payment. Owners also pay property tax, insurance, maintenance and closing costs, while renters can invest the down payment instead. This calculator follows both paths month by month for the years you expect to stay and compares the money each one leaves you with at the end.

How to use this tool

1. Enter the home price, your down payment, the mortgage rate and the loan term.
2. Enter how many years you expect to stay and the rent for a comparable home.
3. Adjust the yearly rent increase and home price growth to your local market.
4. Fill in property tax, insurance, maintenance, HOA, buying and selling costs.
5. Set the return you could earn on savings, then read the net worth comparison and the break-even year.

Formula

Buy net worth = Value × (1 − selling costs) − loan balance + buyer savings
Rent net worth = (down payment + closing costs) grown at the investment return + renter savings

Each month the cheaper side invests the gap between owning cost (mortgage, tax, insurance, maintenance, HOA) and rent, so both sides spend the same cash. Savings compound monthly at the investment return. The first break-even year includes a tie and does not guarantee buying stays ahead. Returns are annual effective; monthly savings are invested at month-end.

Example

Take the default case: a $400,000 home with $80,000 down at 6.5% for 30 years (a $2,022.62 payment) against renting a similar home for $2,200 a month. With 1.1% property tax, $1,800 insurance, 1% maintenance, 3% closing costs, 6% selling costs, 3% yearly growth in rent and price and a 5% return on savings, owning costs $2,872.62 in the first month. After 7 years renting leaves you about $11,645 ahead ($184,746 against $173,101). Stay 12 years instead and buying wins by about $25,201, with the break-even in year 9.