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Rent vs Buy Calculator

Compare the true cost of renting versus buying over time. Find out which option makes more financial sense for your situation.

If You Buy

$
$

20% of home price

%
%/yr
$ /yr
$ /mo
%/yr

% of home value annually

If You Rent

$
%
$ /yr

Assumptions

years

How long you plan to stay

%/yr

Historical avg ~3-4%

%/yr

If you invested instead

Enter your details and click Compare

to see which option is better for you

Rent vs Buy

This calculator compares the total financial outcome of renting versus buying. It accounts for home equity buildup, opportunity cost of your down payment, and the true cost of homeownership including taxes, insurance, and maintenance.

How to Use

  1. 1 Enter the home price and down payment you're considering.
  2. 2 Enter equivalent rent for a similar property in your area.
  3. 3 Set how long you plan to stay—this significantly affects the outcome.
  4. 4 Adjust assumptions for appreciation and investment returns.

FAQ

Why does time horizon matter so much?

Buying has high upfront costs (closing costs, moving, etc.) that take years to recoup. The longer you stay, the more these costs are spread out and the more equity you build. Typically, buying becomes better after 5-7 years.

What about opportunity cost?

If you rent, your down payment can be invested. At 7% annual returns, $80,000 grows significantly over time. This calculator factors this in—if renting is cheaper monthly, those savings are also invested.

Is 3% home appreciation realistic?

Historically, US home prices have appreciated about 3-4% annually on average, roughly matching inflation. Some areas see higher appreciation, but it's not guaranteed. Be cautious with assumptions above 4%.

What costs are included?

For buying: mortgage payments, property taxes, insurance, PMI (if applicable), HOA, and maintenance. For renting: rent and renters insurance. This doesn't include utilities (similar for both) or closing costs (would make buying look worse short-term).

What about tax benefits?

This calculator doesn't include mortgage interest deduction because most people now take the standard deduction. If you itemize, buying may be slightly more favorable, but the benefit is smaller than it used to be.

Calculator Limitations

This calculator doesn't include closing costs, selling costs (typically 6-10%), tax benefits, or lifestyle factors. Investment returns and appreciation are assumptions—actual results will vary.