Rent vs Buy Calculator
Compare the estimated housing cost of renting with buying over a selected period
Lower estimated housing cost
How we calculated it
About the Rent vs Buy Calculator
Renting and buying create different cash flows rather than one simple monthly-payment comparison. Buying adds ownership costs and builds equity; renting avoids some ownership expenses but generally does not create home equity.
This calculator compares those streams over a chosen time horizon. The answer can change sharply with home appreciation, rent growth, transaction costs, mortgage rate and how long you expect to stay.
How to Use the Rent vs Buy Calculator
- Enter realistic monthly rent and expected rent growth for the renting scenario.
- Enter home price, down payment, mortgage terms and ongoing ownership costs for the buying scenario.
- Include transaction costs and the time you expect to remain in the property.
- Run conservative and optimistic scenarios rather than relying on a single appreciation or investment-return assumption.
How the Calculation Works
The renting side accumulates rent and other modeled renter costs over time. The buying side combines mortgage payments, property costs, transaction costs and the change in home equity from principal repayment and property value.
The calculator compares net financial position or cumulative cost at the selected horizon. Opportunity cost of the down payment may also be included when an alternative return is entered.
Worked example
Rent vs Buy Calculator Worked Example
Why a 5-year horizon can change the comparison
Suppose buying requires $18,000 of combined purchase and eventual selling costs while renting avoids those transaction costs. Spread over only 2 years, that is the equivalent of $9,000 per year of transaction cost before considering equity or appreciation. Spread over 10 years, the same $18,000 averages $1,800 per year. This is why holding period can materially change a rent-versus-buy result.
Result guide
Understanding Your Rent vs Buy Calculator Result
A numerical advantage for buying or renting is conditional on the assumptions entered. Lifestyle flexibility, maintenance responsibility and uncertainty about moving are important even when they do not appear in the financial result.
Before you rely on the answer
Assumptions and Limitations
- Rent growth, home appreciation and investment return are scenario assumptions.
- Ownership costs such as tax, insurance and maintenance are included consistently.
- Transaction costs and holding period reflect the likely real situation.
Practical tip
Using This Result in Practice
Pay special attention to how long you expect to stay. Rent-versus-buy models are often more sensitive to holding period and transaction costs than users expect.
Related calculations
Useful Calculations to Continue With
Use the Mortgage Calculator to validate the principal-and-interest payment used in the buying scenario.
If the purchase price itself is still uncertain, use the House Affordability Calculator before running the rent-versus-buy comparison.
Common questions
Rent vs Buy Calculator FAQ
Does buying always become better if I stay long enough?
Not automatically. The result still depends on property costs, appreciation, financing and the alternative use of your money.
Should maintenance be included in the buying side?
Yes if you want a realistic ownership-cost comparison. Omitting maintenance can make buying look artificially cheap.
What happens to the down payment in the comparison?
It becomes home equity but also has an opportunity cost because that cash could potentially have been held or invested elsewhere.