Rent vs Buy Calculator

How to use this calculator

Enter what you would pay in monthly rent, then the price of the home you would buy instead, your down payment, mortgage rate, and how many years you expect to stay. Open Advanced to fine-tune home appreciation, how fast rent rises, and yearly upkeep. The verdict, costs, and chart update instantly. The single most important input is the number of years you plan to stay — buying rewards patience, so the answer can flip entirely as that number changes.

How this is calculated

For buying, we take a loan of price minus down payment and amortize it over a standard 30-year mortgage at your rate to find the monthly principal-and-interest payment. We add up every payment you make during your stay, add yearly upkeep (taxes plus maintenance, estimated as a percent of the price), and subtract the equity you walk away with — your home's appreciated value minus the loan balance still owed. The net cost to buy is your down payment plus payments plus upkeep, less that ending equity. For renting, we total the rent you pay each year, growing it by your rent-increase rate annually.

This is a deliberately simplified model. It ignores closing costs, agent fees, tax deductions, insurance, HOA dues, security deposits, and the return you might earn by investing your down payment elsewhere. Treat it as a directional estimate, not advice — see our disclaimer.

A worked example

Say rent is $2,000 a month and the home you would buy costs $400,000 with an $80,000 down payment at a 6.5% rate, and you stay 7 years. Your mortgage payment is about $2,022 a month, so over seven years you pay roughly $170,000 in principal and interest, plus around $56,000 in taxes and upkeep. But the home appreciates at 3% a year to about $492,000, and you have paid the loan down — so you walk away with sizeable equity. Subtract that equity and the net cost of buying often lands close to, or below, the total rent paid over the same stretch. Renting that same period, with 3% annual increases, totals roughly $185,000 with nothing to show for it at the end.

Why the time horizon decides it

Buying carries large up-front and recurring costs that only pay off once appreciation and equity have had time to build. Stay just two or three years and the costs of owning — interest-heavy early payments and upkeep — usually make renting cheaper. Stay seven, ten, or fifteen years and ownership tends to pull ahead as your equity grows and rent keeps climbing. This is why there is no universal answer: the break-even point depends entirely on how long you stay, your rate, and how fast prices and rents move. For the monthly payment side of the decision, our mortgage calculator breaks down principal, interest, and amortization in detail.

Common mistakes to avoid

• Forgetting upkeep — owners pay property tax, insurance, and maintenance that renters do not. These quietly add up year after year.
• Ignoring opportunity cost — a large down payment tied up in a home is money that could have been invested elsewhere.
• Assuming you'll stay put — life changes. If there is a real chance you move within a few years, that shortens your horizon and favors renting.
• Over-optimistic appreciation — home values do not rise every year. Use a conservative figure for planning.