Rent vs Buy Calculator
Enter your numbers below to compare projected outcomes for renting and buying over your chosen time period.
This model is educational and simplified. It does not include taxes, utility differences, moving costs, or local legal factors.
How this mortgage vs rent calculator works
This calculator compares two paths over time: buying a home with a mortgage versus continuing to rent and investing the difference. It is designed to help you see the long-term financial tradeoff, not just the monthly payment.
The model starts with your home purchase assumptions (price, down payment, loan rate, taxes, insurance, maintenance, and HOA), then compares those costs with your rent assumptions (rent, rent growth, and renter's insurance).
What the calculator includes
- Mortgage principal and interest with amortization
- Property tax and maintenance as a percent of current home value
- Home insurance and HOA fees
- Home appreciation over time
- Closing costs and estimated selling costs
- Rent increases over time
- Investment growth for money kept while renting
How to read your results
You will see projected net worth for both options at the end of your chosen comparison period.
- Buying projected net worth is estimated home equity after selling costs.
- Renting projected net worth is the investment account value if you rent and invest available cash.
- Difference shows which option is ahead financially under your assumptions.
If buying is ahead, it means ownership builds more net worth in this scenario. If renting is ahead, the flexibility and invested capital outperform ownership under current inputs.
Important assumptions that can change everything
1) Time horizon
Buying tends to look better over longer periods because equity builds slowly at first, while transaction costs are front-loaded. If you may move in just a few years, renting often wins.
2) Interest rates and home prices
Small changes in mortgage rates can shift monthly costs by hundreds of dollars. Re-run this calculator using a range of rates so your decision is not based on one estimate.
3) Rent growth and investment return
If rent rises quickly and your mortgage is fixed, buying can become more attractive over time. But if you can reliably invest and earn strong returns, renting can remain competitive.
4) Maintenance and true ownership costs
Home maintenance is often underestimated. A good rule of thumb is 1% to 2% of home value per year, but older homes can cost more.
When buying may be the better move
- You plan to stay in the area for many years
- You value payment stability with a fixed-rate mortgage
- You can afford maintenance, emergency repairs, and transaction costs
- You want to build forced savings through principal paydown
When renting may be smarter
- Your career or lifestyle requires mobility
- Home prices are high relative to rents in your market
- You can invest the difference consistently and avoid lifestyle inflation
- You prefer lower responsibility and fewer surprise expenses
Use this as a decision tool, not a guarantee
No calculator can perfectly predict the housing market or your personal life. The best approach is to test multiple scenarios: conservative, base case, and optimistic. If the same option wins across all three, your decision is likely more robust.
For many households, the right answer is not “always rent” or “always buy.” The right answer is the option that aligns with your cash flow, risk tolerance, job stability, and long-term goals.