Rent vs. Buy Calculator
Compare the true cost of renting versus buying a property.
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rentVsBuy.groupBuying
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Renting and buying both cost money — the question is which costs more over your time horizon. Buying builds equity but ties up capital; renting keeps you flexible but leaves nothing behind. This calculator accounts for mortgage payments, opportunity cost of your down payment, property appreciation, rent increases, and maintenance to give you a realistic break-even year.
Example Calculation
Down payment: $100,000
Key Formulas
Monthly mortgage (P&I) = P × [r(1+r)^n] ÷ [(1+r)^n − 1] Home value at year Y = Purchase Price × (1 + appreciation)^Y Equity at year Y = Home value − Remaining loan balance Net cost of buying = total payments + maintenance − equity gained Net cost of renting = total rent paid (compounding annually)
What Drives the Break-Even Point
Buying wins over time because principal paydown and appreciation build equity. Renting wins in the short run because transaction costs (closing costs, agent fees) are steep. High mortgage rates push the break-even further out. High rent inflation pulls it closer. The opportunity cost of the down payment — what it would earn invested — always favors renting on paper but rarely beats the forced savings of a mortgage.
Frequently Asked Questions
What's not included in this calculation?
Tax deductions for mortgage interest, HOA fees, and the psychological value of stability are hard to model but can tip the balance.
How does investment return on the down payment affect the result?
If your down payment could earn 7% in index funds, that's a real cost of buying. The calculator reflects this as opportunity cost.
When does renting permanently win?
In very high cost-of-living areas with low appreciation, or if you move within 3–5 years, renting often comes out ahead.
Should I put more than 20% down?
More down lowers your payment and eliminates PMI, but reduces liquidity. Run both scenarios in the calculator.