Rent vs Buy Calculator

Compare the true cost of renting versus buying over time.

Free Tool
Disclaimer: This calculator provides estimates for educational purposes only. Actual costs vary based on location, market conditions, tax situations, and personal circumstances. This is not financial or real estate advice. Consult qualified professionals before making housing decisions.
🏢 Renting
3%
🏠 Buying
20%
Down payment: $80,000
6.5%
Typical: 0.5% - 2.5%
Rule of thumb: 1% of home value
⚙️ Assumptions
7 years
3%
Historical avg: 3-4%
7%
If renting, down payment invested
Agent fees, closing costs, etc.
For mortgage interest deduction
After 7 Years
Buying is better by $45,000
You'll build $120,000 in equity while a renter builds none
🏢 Renting Costs
Total Rent Paid $168,000
Renter's Insurance $1,400
Investment Gains +$42,000
Net Cost $127,400
🏠 Buying Costs
Mortgage Payments $168,000
Property Taxes $33,600
Insurance & Maintenance $19,600
Tax Savings -$15,000
Home Equity +$165,000
Selling Costs $28,000
Net Cost $82,200
📊 Cumulative Cost Comparison
📚 How This Calculator Works

This calculator compares the true cost of renting vs. buying by accounting for all the factors most simple calculators miss:

Renting Costs Include:

  • Monthly rent (with annual increases)
  • Renter's insurance
  • Minus: Investment returns if down payment was invested instead

Buying Costs Include:

  • Mortgage payments (P&I)
  • Property taxes, insurance, maintenance
  • PMI if down payment < 20%
  • Selling costs when you move
  • Minus: Equity built + appreciation + tax deduction

Key insight: The "break-even point" is when buying becomes cheaper than renting. This typically happens between 3-7 years depending on your market. If you'll move sooner, renting often wins.

💡 Factors to Consider Beyond the Numbers

🔄 Flexibility

Renting offers mobility. If you might relocate for work or personal reasons within 3-5 years, renting protects you from selling costs.

🛠️ Maintenance Freedom

Renters don't pay for broken appliances, roof repairs, or HVAC replacement. These costs can be significant and unpredictable.

📈 Forced Savings

A mortgage is forced savings—you build equity each month. Renters need discipline to invest the difference consistently.

🏠 Personalization

Homeowners can renovate, paint, and make the space their own. This has psychological value not captured in financial calculations.