Free calculator · Updated
Rent vs Buy Calculator
The net cost of renting and of buying over the years you plan to stay.
Buying
Renting
Renting is cheaper by
$18,235
Over 7 years, under these assumptions.
Behind the numbers
Net cost = cash out minus what you keep. Small changes to appreciation, rent growth or the investment return can flip the answer: try a few. Illustrative only, not financial advice.
How the calculator works
- Enter how long you plan to stay.
- Fill in the buying side (price, loan, costs, appreciation) and the renting side (rent, increases, investment return).
- Compare the net cost of each path; try other assumptions to see where the answer flips.
Assumptions to check
- Net cost of buying = cash paid (down payment, closing costs, payments, tax, insurance, maintenance) − equity after selling costs.
- Net cost of renting = rent paid − investment growth on the down payment and closing cash.
- Monthly savings from the cheaper path are not invested; no tax effects are modeled.
Frequently asked questions
Is it better to rent or buy a home?
It depends on how long you will stay, local prices and rents, the mortgage rate, and what return you could earn investing your down payment instead. The longer you stay, the more buying tends to win, because purchase and selling costs are spread over more years and you build equity. This calculator compares the net cost of each over your time horizon.
What is the break-even point for buying?
It is the number of years you must stay for buying to become cheaper than renting, once closing and selling costs, equity and the opportunity cost of your down payment are counted. It is very sensitive to rates, appreciation and rent levels, so change the years in the calculator until the answer flips.
Why does the calculator ask for an investment return?
If you rent instead of buying, your down payment and closing cash stay invested. The growth on that money is a real benefit of renting, so it is subtracted from renting’s cost to compare fairly against the equity you would build by owning.
What costs does buying include here?
Down payment and closing costs, monthly principal and interest, property tax, insurance and maintenance, minus the equity you keep after selling costs. Renting includes rent (rising each year) minus the investment growth on the cash you did not put down.
Leaning toward buying? See the payment at a specific price with the mortgage calculator.
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Estimates for planning and illustration only. Not financial, tax, legal or appraisal advice: confirm figures with the lender, title or escrow company, or other professional handling the transaction.