Rent vs Buy Calculator

Use the Rent vs Buy Calculator

Your results

Total cost of renting: $0.00
Total cost of buying: $0.00
Estimated home equity: $0.00
Rent vs buy difference: $0.00
Better option under assumptions: —

How this calculator works

What it does: Compare the estimated net cost of renting with buying a home, including mortgage payments, ownership expenses, home equity, appreciation, and down payment opportunity cost.
Inputs used: The estimate uses monthly rent, home purchase price, down payment, mortgage interest rate (%), loan term (years), property tax rate (%), home insurance per year, hoa per month, maintenance rate (%), expected home appreciation (%), expected investment return (%), and number of years to compare.
Calculation approach: The calculator applies the relationships defined for the rent vs buy calculator to those inputs and updates total cost of renting, total cost of buying, estimated home equity, rent vs buy difference, and better option under assumptions.
How to read the result: Treat the result as a scenario based on the values entered. Compare a few reasonable inputs and consider costs, taxes, timing, or risks that the calculator does not include.

How to Use This Calculator

Enter Monthly rent, Home purchase price, Down payment, and Mortgage interest rate (%) using values that match the scenario you want to evaluate.
Enter Loan term (years), Property tax rate (%), Home insurance per year, and HOA per month using values that match the scenario you want to evaluate.
Enter Maintenance rate (%), Expected home appreciation (%), Expected investment return (%), and Number of years to compare using values that match the scenario you want to evaluate.
Review the assumptions for the rent vs buy calculator, especially rates, time periods, and optional amounts.
Select Calculate to update the results, then adjust one input at a time to compare scenarios.

Understanding the Results

Total cost of renting: The combined amount estimated from the recurring values and time period in this scenario.
Total cost of buying: The combined amount estimated from the recurring values and time period in this scenario.
Estimated home equity: The estimated home equity estimated by the Rent vs Buy Calculator using monthly rent, home purchase price, and down payment and the other values entered.
Rent vs buy difference: The difference between the current position and the calculated target or comparison value.
Better option under assumptions: A plain-language comparison based only on the assumptions entered; it is not a guarantee or personal recommendation.

Common Mistakes

Comparing only the mortgage payment and rent while overlooking taxes, insurance, maintenance, fees, and transaction costs.
Using the maximum approved amount instead of a payment that fits the full household budget.
Spending all available cash on the purchase and leaving no emergency or repair reserve.
Assuming home appreciation or future refinancing is guaranteed.

Worked Example

Example inputs

Monthly rent: $2,500
Home purchase price: $500,000
Down payment: $100,000
Mortgage interest rate (%): 6.5%
Loan term (years): 30
Property tax rate (%): 1.2%
Home insurance per year: $2,000
HOA per month: $0
Maintenance rate (%): 1%
Expected home appreciation (%): 3%
Expected investment return (%): 7%
Number of years to compare: 10

Example results

Total cost of renting: $300,000.00
Total cost of buying: $297,254.10
Estimated home equity: $332,853.68
Rent vs buy difference: $2,745.90 less to buy
Better option under assumptions: Buying

Under these example assumptions, the better option under assumptions is Buying. This comparison illustrates the entered scenario and is not a guarantee that the same option will be better in practice.

Frequently asked questions

How does this calculator compare renting and buying?

It compares rent payments with the net cost of buying. Buying includes the down payment, mortgage payments, property tax, insurance, HOA, maintenance, and foregone investment growth, then subtracts estimated home equity.

Why is home equity subtracted from buying costs?

Home equity is an asset retained after the comparison period. It equals the estimated home value minus the remaining mortgage balance, so subtracting it avoids treating principal payments as a pure expense.

How is the down payment opportunity cost calculated?

The calculator estimates how much the down payment could have grown at the entered investment return and counts the growth that was forgone as an additional cost of buying.

Does this calculator include closing or selling costs?

No. Closing costs, real estate commissions, rent increases, tax deductions, mortgage insurance, utilities, and major renovations are excluded because they are not among the provided inputs.

Does a lower calculated cost guarantee the better choice?

No. The result depends heavily on appreciation, investment returns, maintenance, financing, and how long you stay. Flexibility, location, risk, and lifestyle preferences also matter.

What does the Rent vs Buy Calculator calculate?

Compare the estimated net cost of renting with buying a home, including mortgage payments, ownership expenses, home equity, appreciation, and down payment opportunity cost. The result is based only on the inputs and assumptions shown on the page.

How should I interpret the better option under assumptions from the Rent vs Buy Calculator?

Use it as an estimate for the scenario entered, not as a guarantee or personal recommendation. Test changes to monthly rent, home purchase price, and down payment to see which assumptions have the greatest effect.