Advanced Rent vs Buy Calculator
Compare renting versus buying with full analysis including mortgage, property taxes, maintenance, opportunity cost, and home appreciation over any time horizon.
Rent vs Buy is one of the biggest financial decisions you can make. This calculator performs a detailed comparison over your chosen time horizon, accounting for appreciation, investment returns, and all recurring costs.
How the calculation works:
For buying, the calculator totals all monthly costs (mortgage, property tax at 1.2%, maintenance at 1%, insurance at 0.4%) over the time period. It then subtracts the equity you build — your home’s appreciated value minus the remaining loan balance.
For renting, it totals all rent payments (with 3% annual increases) over the same period. It then adds the investment gains you would earn by investing the down payment in the stock market instead (assumed 7% return).
Net cost comparison:
Net Cost of Buying = Total Monthly Payments - Equity Built + Down Payment
Net Cost of Renting = Total Rent Paid - Investment Gains on Down Payment
What each variable means:
- Monthly Rent: your current or expected rent payment.
- Home Purchase Price: the total price of the home.
- Down Payment (%): percentage of the purchase price paid upfront. This amount gets invested instead if you choose to rent.
- Mortgage Rate (%): your annual interest rate on a 30-year fixed mortgage.
- Time Horizon: how many years you plan to stay. This is the most important variable.
Practical example: Rent = $2,000/month, home price = $400,000, 20% down ($80,000), 6.5% mortgage rate, 10-year horizon. The calculator compares all buying costs and equity gains against total rent paid and the growth of $80,000 invested at 7%.
Key insight: The breakeven point is typically 5–7 years. If you plan to move sooner than that, renting is often cheaper because closing costs, transaction fees, and slow early equity building eat into your returns. The longer you stay, the more buying tends to win due to appreciation and rising rents.
Assumptions used: 3.5% annual home appreciation, 3% annual rent growth, and 7% annual stock market return. Actual results will vary based on your local market and economic conditions.