Rent vs Buy Calculator

The rent vs buy decision is one of the biggest financial choices most people face. This calculator helps you compare the total cost of each option over your planned time horizon.

What the calculator considers

For renting: monthly rent with an assumed 3% annual increase, plus the investment return you could earn on money that would otherwise go to a down payment.

For buying: down payment, monthly mortgage payments (30-year fixed), property tax, maintenance costs, homeowner's insurance, and the equity you build as the home appreciates and the loan balance decreases.

Key factors in the decision

- Time horizon: Buying typically becomes cheaper the longer you stay. Transaction costs (closing costs, realtor fees) make short stays expensive. - Home appreciation: Even modest appreciation (3-4% per year) significantly impacts the outcome over 10+ years. - Opportunity cost: Your down payment could be invested. At 7-8% stock market returns, this opportunity cost is significant. - Tax benefits: Mortgage interest may be tax-deductible, though this benefit has decreased with higher standard deductions.

How to interpret results

The calculator shows total costs for both options and a break-even year. If you plan to stay longer than the break-even point, buying is likely better financially. If shorter, renting may save money.

Important caveats

This is a financial comparison only. Non-financial factors — stability, freedom to move, pride of ownership, maintenance responsibility — are equally important and personal.