Rent vs Buy Calculator
Enter your assumptions below to compare long-term net worth if you rent versus buy.
What this NYTimes rent vs buy calculator replica does
The original New York Times calculator became popular because it reframed the home-buying question: it is not just about monthly payment, it is about total wealth over time. This page follows that same idea. It compares your projected net worth after a chosen number of years under two paths: renting and investing vs buying and building equity.
Instead of giving only a “buy” or “rent” label, the tool also estimates a break-even rent—the monthly rent where both choices come out roughly equal under your assumptions.
How the model works
Buying scenario
- Calculates mortgage payment from loan amount, interest rate, and term.
- Adds recurring owner costs: property tax, insurance, maintenance, and HOA.
- Grows home value based on annual appreciation.
- Computes equity at sale after estimated selling costs.
Renting scenario
- Starts with current rent and applies annual rent growth.
- Includes renters insurance.
- Invests cash not spent on down payment and closing costs.
Investment comparison
Every month, whichever option is cheaper gets to invest the monthly difference. Investments grow at your assumed annual return. That creates a fairer apples-to-apples comparison because cash savings are treated as wealth, not ignored.
How to use the calculator effectively
To get useful results, focus on realistic local assumptions rather than national averages.
- Home appreciation: Avoid using extreme values; test conservative and optimistic cases.
- Rent growth: Use your city’s recent trend or your landlord’s historical increases.
- Maintenance: Older homes often exceed 1% per year.
- Time horizon: The shorter your stay, the more transaction costs can hurt buying.
Interpreting your results
If buying wins by a wide margin, it usually means expected equity growth plus forced principal payments outweigh the flexibility of renting. If renting wins, high purchase costs, high mortgage rates, short stay, or stronger alternative investment returns may be the main drivers.
The break-even rent is especially useful when deciding whether to renew a lease, move to a similar unit, or begin shopping for homes. If your actual rent is far above break-even, buying is generally more attractive. If it is far below, renting may be the better financial choice.
Common rent vs buy mistakes
- Comparing only monthly mortgage principal and interest to rent.
- Forgetting maintenance, taxes, and selling costs.
- Assuming you will stay much longer than is realistic.
- Ignoring investment growth on money not tied up in the home.
Final thought
Buying a home is partly a financial decision and partly a lifestyle decision. Use this calculator to understand the money side clearly, then weigh personal factors like flexibility, stability, school district preferences, commute, and long-term plans.
Disclaimer: This calculator is for educational purposes and is not tax, legal, or investment advice. It uses simplified assumptions and does not include every possible cost or tax rule.