Rent vs. Buy Calculator
Compare your net worth after renting versus buying, month by month — including appreciation, investing the difference, maintenance, and the cost of selling.
How the rent vs. buy comparison works
Comparing a mortgage payment to rent misses most of the story. This calculator follows two versions of you, month by month, who start with the same cash and spend the same amount each month:
- The buyer pays the down payment and closing costs, then the mortgage, property tax, insurance, maintenance, and HOA. The home appreciates, and the loan balance shrinks.
- The renter invests the cash the buyer spent upfront and pays rent. Each month, whoever has the lower housing cost invests the difference at your investment return.
At the end, the buyer's net worth is the home's value minus selling costs and the remaining loan, plus any investments; the renter's net worth is their investment portfolio. The break-even point is the first year in which buying comes out ahead.
What drives the result
Time is the biggest factor: buying and selling costs (often 8–10% combined) take years of appreciation and principal paydown to recover, so short stays usually favor renting. Higher rents, faster appreciation, and lower mortgage rates favor buying; higher investment returns and higher maintenance or tax costs favor renting.
What's not included
The model ignores income taxes (such as the mortgage interest deduction and capital gains exclusions), renter's insurance, and the non-financial value of stability or flexibility. Treat it as a way to understand the trade-offs, not a final answer.
Frequently asked questions
Is renting throwing money away?
No. Renting buys housing, just as mortgage interest, property taxes, and maintenance do for an owner. The real question is which option leaves you with more wealth over your time frame, which is what this calculator estimates.
How long do I need to stay for buying to make sense?
It depends on your numbers, but because of buying and selling costs, many scenarios need five or more years to break even. Check the break-even result above for your inputs.
What investment return should I use?
Use what you'd realistically earn on money you'd otherwise put into the home. A long-term diversified stock portfolio has historically returned more than a savings account, but with much more volatility.
Why does maintenance matter so much?
Owners pay for repairs, replacements, and upkeep that renters don't. A common rule of thumb is 1% of the home's value per year, more for older homes.