rent versus buy calculator - Aaron Graves, PhDude Replica

Rent vs Buy Inputs

Home Purchase Assumptions

Home Price ($)

Down Payment (%)

Mortgage Interest Rate (%)

Loan Term (Years)

Property Tax (% of home value / year)

Maintenance (% of home value / year)

Home Insurance ($ per year)

HOA ($ per month)

Closing Costs (% of home price, upfront)

Selling Costs (% at sale)

Home Appreciation (% per year)

Analysis Period (Years)

Renting Assumptions

Current Rent ($ per month)

Rent Increase (% per year)

Renter's Insurance ($ per month)

Investment Return (% per year)

This model compares projected net worth after the analysis period, including investment of monthly cost differences.

How this rent versus buy calculator works

This calculator compares two paths over the same time period: renting your home versus buying a home. Instead of only comparing monthly payments, it estimates net worth at the end of the period. That includes home equity, transaction costs, rent growth, and investment growth.

In short: if one option costs less each month, the model assumes the savings are invested. That makes the comparison more realistic because the cheaper path does not simply “disappear” into lifestyle spending.

What is included in the buying scenario?

Down payment and upfront closing costs
Mortgage payment (principal + interest)
Property tax, maintenance, insurance, and HOA
Home appreciation over time
Selling costs when you exit the property

What is included in the renting scenario?

Monthly rent and yearly rent increases
Renter’s insurance
Investment growth on:
- Money not used for down payment/closing costs
- Any monthly savings compared with owning

Key idea: Buying builds home equity. Renting can build investment assets. The better financial choice depends on your assumptions and time horizon.

Most important inputs to test

1) Time horizon

Buying tends to look better over longer periods because closing/selling costs are spread across more years. If you might move in 3–5 years, renting often wins financially.

2) Home appreciation and investment return

These two assumptions strongly shape the result. If home prices grow slowly and market returns are strong, renting can outperform. If home values rise steadily and you stay put, buying often closes the gap quickly.

3) True ownership costs

Underestimating property tax, repairs, maintenance, and insurance is a common mistake. A clean “rent versus mortgage payment” comparison is incomplete.

When renting can be the smarter move

You value flexibility and may relocate soon
Local price-to-rent ratios are very high
You can reliably invest the monthly difference
You want to avoid repair and maintenance risk

When buying can be the smarter move

You plan to stay in the home long term
Your housing market has healthy long-term demand
You want stable payments instead of rent volatility
You want forced savings through principal paydown

Practical tips before you decide

Run conservative, base-case, and optimistic scenarios
Test at least three time horizons (5, 10, and 15 years)
Set realistic maintenance and vacancy assumptions
Keep an emergency fund either way
Remember: lifestyle fit matters as much as math

Bottom line

There is no universal “right” answer to rent versus buy. The right decision is the one that fits your timeline, finances, and risk tolerance. Use this calculator as a planning tool, then validate assumptions with local data and your own goals.