Rent vs Buy Calculator

Compare owning with renting over the years you expect to stay, using assumptions you set.

How to use ↓

Rent vs buy

Starting values are examples, not current rates or averages. Replace them with yours.

Step 1 Buying

The costs below are examples, not quotes or averages. Edit every one.

As a percent of the home value each year. Some states limit how fast the taxed value can rise.

Enter 0 if there are none.

Leave blank for none.

Step 2 Renting
Step 3 Assumptions about the future

These are examples, not forecasts. Enter all of them in nominal terms (not adjusted for inflation). Nothing is left blank or counted as zero for you. Break-even swings widely with home price growth. With the starting values: 4% growth gives break-even in month 48 (4 years); 3% gives break-even in month 75 (6 years 3 months); 2% gives no break-even within 10 years. One point of growth can move the answer by years.

Before tax.

Step 4 Calculate

How to use

  1. Enter the home price, down payment, rate and the costs of buying.
  2. Enter the rent and the renter insurance.
  3. Set your assumptions for price growth, rent growth and investment return.
  4. Press Calculate for the break-even point and a year-by-year table.

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How the comparison works

The calculator follows both paths month by month. The buyer pays the mortgage, tax, insurance, maintenance and any HOA dues, and owns a home that grows or shrinks in value. The renter pays rent and invests the money that buying would have needed up front, plus any monthly difference.

Buying stays ahead from the break-even point: the first month after which the buyer's net wealth stays above the renter's. The result depends heavily on the assumptions for home price growth, rent growth and investment return, so the starting values are examples, not forecasts.

Every assumption has an editable starting value and none is left blank or counted as zero. Taxes are not included. Selling a main home can be partly tax-free in the US (IRS Topic 701), mortgage-interest deductions depend on whether you itemise, and investment returns may be taxed. It also leaves out moving costs, home improvements and anything that is not money.

Worked example

A $375,000 home with 20% down at 6.5%, against renting for $2,200 a month, assuming 3% a year growth in home prices and rent and a 5% return on savings. Buying stays ahead from 6 years 3 months, and after 10 years it is ahead by $35,662.99. Cash needed to buy is $86,250.00.

Change one assumption and the answer moves. With home prices growing 1% a year instead of 3%, buying is not ahead within 10 years, and after 10 years behind by $38,412.96. These are examples, not forecasts.

FAQ

Is buying better if I stay long enough?

Not necessarily. It depends on prices, rent, rates, costs and returns. Try several sets of assumptions.

Why does the answer change so much?

Small changes in home price growth, rent growth or investment return compound over many years and can flip the result. A one-point change in home price growth can move the break-even by years; the result shows a small table of this.

Are taxes included?

No. Taxes are not included. Selling a main home can be partly tax-free in the US (IRS Topic 701), mortgage-interest deductions depend on whether you itemise, and investment returns may be taxed. Property tax, maintenance and returns are your assumptions.

What is renter savings?

The investment the renter builds from the cash that buying would have needed up front, plus any monthly difference, at the return you enter.