Housing calculator
Rent vs Buy Calculator
Compare simplified renting and buying costs over a time period using your own assumptions.
How this calculator works
The tool compares rent paid over the selected period with a simplified homebuying model that includes mortgage payments, property tax, maintenance, closing costs, and estimated home equity built through appreciation and principal paydown.
The comparison
Rent cost = total rent over the period (with annual growth you set).
Net buy cost = mortgage payments + property tax + maintenance + closing costs − estimated home equity at the end.
The cost gap shows which side is cheaper over your horizon. A positive gap means buying costs more; negative means renting costs more.
Worked example
A $420,000 home with 10% down at 6.75% over a 7-year horizon, versus $2,200 rent growing 3% a year. Buying means a roughly $2,350 mortgage payment plus property tax and maintenance; renting starts cheaper but climbs each year. After 7 years, much depends on home appreciation — at 3% annual appreciation the equity built can close much of the gap, while at 0% the rent side often looks better. Adjust the appreciation and horizon fields to find your break-even.
The break-even horizon matters most
Buying carries heavy upfront costs (down payment, closing) and slow early equity build — most of your early mortgage payments go to interest. Renting starts cheaper but rises over time and builds no equity. The crossover — the number of years where buying's cumulative cost drops below renting's — is the key number, and it varies sharply by city, mortgage rate, and appreciation assumptions. A common rule of thumb: buying tends to win only if you stay 5-7+ years.
What this model leaves out
To stay transparent, this simplified model does not include:
- PMI (private mortgage insurance) for down payments under 20%
- HOA fees, homeowners insurance, and selling costs at the end
- The mortgage interest and property tax deductions (if you itemize)
- Investment returns on the cash a renter doesn't tie up in a down payment
- Local transfer taxes and major repairs beyond the maintenance estimate
- Lifestyle differences: flexibility, stability, customization
These can swing the result materially, so treat the output as a directional guide, not a verdict.
Related tools & guides
- Full reasoning: Rent vs buy a home: what should you compare?
- Already own? See the Mortgage Extra Payment Calculator.
Frequently asked questions
Is it better to rent or buy a home?
It depends on time horizon, local price-to-rent ratios, mortgage rates, taxes, maintenance, and appreciation. This calculator totals costs so you can see which is cheaper in your case.
How many years until buying wins?
Often 5-7+ years, because closing costs and early mortgage interest take time to offset through equity and appreciation.
What costs does this calculator include for buying?
Mortgage, property tax, maintenance, and closing costs, offset by estimated equity. It excludes PMI, HOA, insurance, selling costs, and tax deductions.
Does renting build wealth?
Not directly, but renting can cost less and free up cash to invest elsewhere. The full comparison depends on what you do with that cash.
Important note
This simplified model does not include tax deductions, PMI, HOA fees, insurance, selling costs, investment returns on cash not used for a down payment, local transfer taxes, or larger repairs. This page provides educational estimates only and is not real estate, mortgage, tax, legal, accounting, or financial advice. See our disclaimer.