Rent vs. Buy Calculator

Compare the true cost of renting versus buying a home over time.

Buying

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Renting

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Shared Assumptions

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10 years
15102030

Better over 10 years

Renting

by $135,686

Buy - Monthly Cost

$3,012

Rent - Monthly Cost

$2,220

Home Value (10yr)$537,567
Net Proceeds from Sale$230,713
Total Buy Cost (gross)$453,476
Buy Net Cost$222,763
Total Rent Cost$305,046
Rent Net Cost (after invest)$87,077
Buy net cost includes closing costs (3%) and selling costs (6%) at the end. Rent net cost accounts for investing the down payment and any monthly savings at the assumed return rate.

How to Use the Rent vs. Buy Calculator

  1. Enter buying costs - home price, down payment, mortgage rate, property tax, maintenance, insurance, and expected home appreciation.
  2. Enter renting costs - current monthly rent, annual rent increase, and renters insurance.
  3. Set the investment return - if renting, the down payment could be invested. This is the assumed annual return (e.g. 7% for a stock index fund).
  4. Set the comparison period - how many years you plan to stay. The longer you stay, the more favorable buying becomes.

The calculator compares the net cost of each option, accounting for home equity built vs. investment returns from the down payment.

Frequently Asked Questions

No. Buying is not always better. It depends on how long you stay, local price-to-rent ratios, what you could earn by investing the down payment instead, and your personal priorities. If you plan to move within 3-4 years, renting usually wins because you cannot recoup closing costs and selling costs (combined 8-11% of the home's value). In high-cost cities where the price-to-rent ratio exceeds 25-30, renting and investing the difference often outperforms buying over 20+ years.

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