Rent vs Buy Calculator
Estimate whether renting or buying may leave you with higher net worth over your expected time horizon.
How this rent vs buy calculator works
The best housing decision is rarely just about the monthly payment. Buying builds equity, but it also ties up cash in a down payment, closing costs, taxes, upkeep, and future selling fees. Renting can be cheaper month-to-month in some markets, and any savings can be invested. This tool compares those trade-offs over your chosen timeline.
Instead of only asking, “Which payment is lower today?”, the calculator estimates a future net worth result: owner net worth versus renter net worth. That gives you a cleaner apples-to-apples framework.
What the calculator includes
Buying side assumptions
- Mortgage payment based on home price, down payment, rate, and term.
- Property taxes and maintenance as percentages of home value.
- Home insurance and HOA as monthly expenses.
- Home appreciation over time.
- Closing costs when buying and selling costs when exiting.
Renting side assumptions
- Current rent and annual rent growth.
- Renter’s insurance.
- Investment growth for money not tied up in a home.
How to interpret your result
If the buying scenario ends with a larger net worth, buying may be financially favored under your assumptions. If renting ends with a larger net worth, renting may be the stronger option for now. Neither outcome is permanent—you can rerun this any time rates, rents, or your timeline changes.
Why timeline matters so much
Short stays often favor renting because buying and selling costs are front-loaded. Longer stays can favor buying because appreciation and principal paydown have more time to compound. If your job or family situation is uncertain, test multiple timelines (for example 3, 5, 7, and 10 years).
Common mistakes when comparing rent vs buy
- Ignoring maintenance and repairs on the ownership side.
- Forgetting selling costs at move-out.
- Assuming rent never increases.
- Using unrealistically high home appreciation assumptions.
- Comparing monthly payment only, not total wealth outcome.
Practical use tips
Run optimistic and conservative cases
Try one “base case,” one conservative case (lower appreciation, higher costs), and one optimistic case. Good decisions survive across a range of reasonable assumptions.
Pair this with lifestyle factors
Financially, one option may win. Personally, the other may still be right. Stability, commute, school district, flexibility, and stress all matter. Let the numbers inform your decision—not completely replace your values.
This calculator is educational and simplified. It does not include every local tax rule, PMI structure, or legal cost. For major decisions, combine this analysis with advice from a licensed financial or mortgage professional.