buying vs rent calculator

Compare long-term net worth if you buy a home versus continue renting and investing the difference.

Buying assumptions

Home Price ($)

Down Payment (%)

Mortgage Rate (%)

Loan Term (Years)

Property Tax (%/year)

Home Insurance ($/year)

Maintenance (% of home value/year)

HOA ($/month)

Closing Costs (%)

Selling Costs at Exit (%)

Home Appreciation (%/year)

Years You Plan to Stay

Renting + investing assumptions

Current Rent ($/month)

Renters Insurance ($/month)

Rent Increase (%/year)

Investment Return (%/year)

Enter your assumptions, then click Calculate.

This model is an educational estimate, not financial advice. Taxes, maintenance shocks, and local market conditions can materially change real-world outcomes.

How this buying vs rent calculator works

This calculator compares two paths over the same time horizon: buying a home or renting and investing. It focuses on net worth at the end of your chosen stay period, not just monthly payment. That matters because buying builds equity while renting can free up cash for investing.

The model includes mortgage amortization, property tax, home insurance, HOA, maintenance, rent growth, and investment growth. It also includes buying and selling transaction costs, which are often the reason short holding periods favor renting.

Inputs you should pay attention to most

1) Years you plan to stay

This is usually the most important variable. If you plan to move soon, transaction costs can outweigh equity growth. If you plan to stay longer, fixed mortgage payments and appreciation can shift the math toward buying.

2) Investment return assumption

Renting can outperform buying if the renter consistently invests the down payment plus any monthly savings. If those dollars are not actually invested, renting may look better on paper than in real life.

3) Rent growth and home appreciation

Small differences in these assumptions can change the result substantially. Try optimistic, base, and conservative scenarios to understand your risk range rather than relying on one forecast.

What the result means

Homeowner net worth: estimated sale proceeds after selling costs and remaining mortgage balance, plus any monthly savings invested.
Renter net worth: down payment and closing cash invested from day one, plus monthly savings invested when renting costs less.
Difference: positive means buying ends with higher projected net worth; negative means renting does.
Break-even year: earliest year where buying catches up to renting under your assumptions.

A practical way to use this tool

Enter realistic numbers from your local market.
Run a base case, then test a downside case (lower appreciation, higher maintenance, lower investment return).
If one option wins in all reasonable cases, the choice is clearer.
If results are close, decide based on flexibility, stress level, and lifestyle needs.

Non-financial factors still matter

Buying is not automatically “better,” and renting is not “throwing money away.” Homeownership can provide stability, control over your space, and forced savings through principal paydown. Renting can provide mobility, lower surprise costs, and less administrative burden.

The best decision is the one that fits both your finances and your life plans over the next several years.

Common mistakes to avoid

Comparing mortgage principal + interest to rent without taxes, insurance, maintenance, and HOA.
Ignoring buying/selling costs and then moving after only a few years.
Assuming high investment returns but not actually investing monthly differences.
Using one scenario instead of a range of plausible outcomes.

buying vs rent calculator