Rent vs Buy Calculator
Make the right housing decision - compare the costs of renting vs buying
General Information
How long you plan to stay
Additional months (0-11)
Cash available for down payment or initial savings
🏢 Renting Costs
Monthly rent payment
Yearly rent increase rate
One-time agent fee
Moving, insurance, etc.
Annual return on savings/investments
🏠 Buying Costs
Total purchase price of the home
Annual mortgage rate
Mortgage duration in years
Expected home value growth
% of property value
% of property value
Repairs & renovations
Closing costs, fees
Agent fees when selling
📊 Comparison Results
Our Recommendation
Renting will save you $281,966 over 5 years
🏢 Total Rent Cost
🏠 Total Buy Cost
💡 Analysis
✓ Renting is more cost-effective for your 5-year period
✓ Lower upfront costs and more flexibility
✓ Your savings can earn $5,569 in interest
✓ No maintenance, property tax, or insurance worries
Example Scenario
Renting
Monthly Rent: $2,000
Annual Increase: 3%
Staying Period: 5 years
Savings Interest: 2%
Total Cost: ~$130,000
Buying
Property Price: $400,000
Down Payment: $50,000
Mortgage Rate: 5%
Appreciation: 2%/year
Total Cost: ~$125,000
Decision Factors
How long you plan to stay
Local real estate market trends
Your financial stability and income
Flexibility needs for relocation
Maintenance responsibilities
Tax benefits of homeownership
When to Rent
• Short-term stay (< 3 years)
• Career or location uncertainty
• Limited savings for down payment
• Prefer flexibility and mobility
• Don't want maintenance responsibilities
• High-priced real estate markets
When to Buy
• Long-term stay (> 5 years)
• Stable income and employment
• Sufficient down payment (20%+)
• Want to build equity
• Desire stability and customization
• Favorable mortgage rates
Understanding Rent vs Buy
The Renting Scenario
When you rent, you pay a fixed monthly amount to live in a property. Your initial savings stay invested, earning interest over time. However, rent payments typically increase annually, and you don't build equity in the property.
Renting Costs Include:
- •Monthly rent payments
- •Renter's insurance
- •Agent commissions
- •Moving costs
The Buying Scenario
When you buy, you make a down payment and finance the rest with a mortgage. You build equity over time through mortgage payments and property appreciation. However, you're responsible for all maintenance, taxes, and insurance.
Buying Costs Include:
- •Monthly mortgage payments
- •Property taxes
- •Homeowner's insurance
- •Maintenance and repairs
- •Closing costs (buying/selling)
How the Calculator Works
Our calculator compares two scenarios over your specified staying period:
Renting Calculation
- • Total rent paid (with annual increases)
- • Plus: Agent commissions and other costs
- • Minus: Interest earned on savings
- • Result: Net cost of renting
Buying Calculation
- • Mortgage payments + property costs
- • Plus: Buying and selling commissions
- • Plus: Remaining mortgage balance
- • Minus: Net proceeds from home sale
- • Result: Net cost of buying
🎯 Key Considerations
Financial Factors:
- • Length of stay (break-even typically 3-5 years)
- • Down payment amount
- • Mortgage interest rates
- • Local property appreciation rates
- • Tax deductions for homeowners
Lifestyle Factors:
- • Job stability and location flexibility
- • Family size and future plans
- • Desire for customization
- • Willingness to handle maintenance
- • Local market conditions
Frequently Asked Questions
How long should I stay to make buying worthwhile?
Generally, you should plan to stay at least 5 years to make buying worthwhile. The break-even point (when buying becomes cheaper than renting) typically occurs between 3-7 years, depending on your local market conditions, mortgage rates, and property appreciation.
What's a reasonable down payment?
A 20% down payment is ideal as it helps you avoid private mortgage insurance (PMI) and qualifies you for better mortgage rates. However, many buyers start with 5-10% down. The more you can put down, the lower your monthly payments and total interest paid over the life of the loan.
Should I include tax benefits in my calculation?
Yes, homeowners can deduct mortgage interest and property taxes on their federal income tax returns (up to certain limits). This can reduce the effective cost of homeownership significantly. Consult with a tax professional to understand your specific situation.
What if property values decrease?
Property values can fluctuate, and in some cases, depreciate. This is why the length of stay matters - real estate tends to appreciate over longer periods. Our calculator allows you to adjust the appreciation rate, including negative values, to model different market scenarios.
What costs are not included in this calculator?
This calculator excludes utilities, which are typically similar whether renting or buying. It also doesn't account for opportunity costs of investing your down payment elsewhere, specific tax situations, or potential rental income if you rent out rooms. These factors should be considered separately.
Is renting always "throwing money away"?
No, this is a common misconception. Renting provides flexibility, predictable costs, and freedom from maintenance responsibilities. If you're staying short-term, in an expensive market, or uncertain about your future, renting can be the smarter financial choice. The key is matching your housing decision to your life situation.