Rent vs. Buy Calculator with Total Cost
Compare renting vs. buying over your time horizon in USD
Rent vs. buy FAQs
Do you invest monthly savings differences?
This version focuses on the opportunity cost of upfront cash only. If renting is cheaper each month, you can approximate investing the difference by copying the summary into a spreadsheet and modelling monthly contributions and growth there.
Are income taxes or mortgage insurance included?
No. The model covers principal and interest plus common owner costs like tax, insurance, maintenance, and HOA, along with rent and renter’s insurance. Mortgage insurance, tax deductions, and credits are not included. Those are highly individual and are best layered on with a tax professional.
What should I use for maintenance and appreciation?
Many owners use 1–2% of home value per year for maintenance in typical markets and test a wide range for appreciation, from 0% up to optimistic scenarios and down into negative territory. If buying only looks good with aggressive appreciation and tiny maintenance, that is a useful signal to proceed carefully.
Is this rent vs. buy calculator financial advice?
No. It is an educational planner that turns a messy decision into side-by-side cash flow estimates. It cannot see your job security, risk tolerance, or lifestyle priorities. Always combine the output with professional advice and your own comfort level before acting.
Rent vs. buy calculator: quick guide
This Rent vs. Buy Calculator with Total Cost is deliberately simple on the surface and heavier under the hood. You only have to feed it a few core numbers: current rent, a realistic home price and mortgage, and how long you think you’ll stay. Underneath, the model tracks cash outflows for both renting and owning, then subtracts the asset you still have at the end—either invested cash as a renter or net home equity as an owner. The comparison is expressed as a single “net cost” for rent and buy over your chosen time horizon.
1. Start with rent and your real horizon
Begin with the side you know: monthly rent. Add renter’s insurance if you carry it and leave it at zero if you do not. Then set your horizon. Five to ten years is common for people who may move for work; longer horizons fit buyers who genuinely plan to stay put. The rent growth field in the advanced section lets you model annual increases. A modest 2–3% per year often matches many markets, but you can dial it up or down based on local data and your risk tolerance.
2. Enter a grounded home purchase, not an idealized one
On the buy side, price, down payment, APR, and term define the loan. A larger down payment shrinks the loan but ties up more cash; a longer term cuts the payment but stretches interest. Property tax, homeowners insurance, maintenance, and HOA are layered on top of the mortgage to reflect the real monthly owner cost your budget will feel. Buyer closing costs and future selling costs capture the friction of changing housing, so they are included as percentages of purchase and sale price rather than ignored in the background.
3. Use the advanced block to test different stories
The compact advanced section is where you test “what if” scenarios. Home appreciation sets how the property value evolves; investment return on cash sets what happens to your down payment and buyer costs if you stay a renter and invest that money instead. Higher expected market returns make renting look relatively better; higher confidence in long-run housing appreciation pushes the model toward buying. The point is not to guess the future perfectly, but to see how sensitive the outcome is when you tilt these assumptions.
4. Read the winner and net cost like a price tag
The result box keeps things tight. It tells you whether rent or buy “wins” for your horizon and roughly by how much, in USD. It shows a quick monthly comparison for today, then a horizon view with net cost for renting, net cost for buying, and a single difference line labeled “buy − rent.” Breakeven time is the first month, if any, when owning’s net cost dips below renting’s net cost. You can treat each net cost as the effective price tag of your preferred number of years in that housing path.
5. Use the calculator as a sandbox, not a verdict
Housing is more than math. You might value stability, yard space, or school districts more than squeezing out the last dollar of return. Use this calculator as a sandbox: try cheaper and more expensive homes, shift down payment percentage, shorten or lengthen the horizon, and see how often the winner flips. When the numbers lean strongly one way, bring the summary to a lender, agent, or advisor and layer on tax effects, mortgage insurance, and local nuances before you commit.
How the rent vs. buy math is approximated
Mortgage payment uses the standard fixed-rate formula. Let L be the loan amount in
USD, a the annual percentage rate as a decimal, and n the
number of monthly payments. The monthly rate is r = a / 12. When r > 0, the
principal-and-interest payment is PMT = L·r·(1+r)^n / ((1+r)^n − 1); when r = 0, it is simply
L ÷ n. Each month, interest is computed as balance × r, and the rest of the payment chips away at principal.
Owner monthly cost equals mortgage payment plus estimates for property tax, homeowners insurance, maintenance,
and HOA dues. Home value at month t uses a monthly growth rate
g = app/12, so value is Price·(1+g)^t. Net equity at a future sale is
calculated as Value·(1 − sell%) − remaining loan balance, where sell% represents total selling
costs. On the rent side, the model sums rent and renter’s insurance and treats upfront buyer cash (down
payment plus buyer closing costs) as an investment that grows at a monthly rate
i = inv/12.
Over your horizon, rent net cost is total rent outflow minus the invested value of that upfront cash. Buy net cost is total cash outflows (including upfront) minus net equity after selling costs. The calculator compares these net figures, reports which path appears cheaper, and approximates a breakeven month if buying eventually pulls ahead. All values are rounded to two decimal places and should be treated as estimates, not precise forecasts or personalized advice.