Money
Rent vs Buy Calculator
Enter rent details and purchase details with a time horizon. The calculator estimates total out-of-pocket cost on each side, subtracts net sale proceeds on the buy side, and shows which is cheaper over your horizon.
Rent side
e.g. 2200
e.g. 3
e.g. 15
Buy side
e.g. 400000
e.g. 60000
e.g. 6.5
e.g. 30
e.g. 1.1
e.g. 125
e.g. 1
e.g. 0
e.g. 3
Agent + closing on sale. · e.g. 6
How long until you'd likely sell or move. · e.g. 7
This is a directional comparison with many assumptions. Results swing with appreciation, rent growth, and how long you stay. The actual best answer for you depends on personal factors this calculator does not capture.
Buying is cheaper over horizon
$43,183.03
Over 7 years, with the assumptions you entered
Directional estimate. Sensitive to assumptions: appreciation, rent growth, time horizon, maintenance %, and selling cost all move the answer. Renting includes flexibility benefits this calculator does not quantify; buying includes stability, customization, and tax considerations it also does not quantify.
Examples
$2,200 rent, $400k home, 7 yr, 6.5% rate
depends on appreciation; often close to even
$2,200 rent, 3% growth · $400k, 1% appr, 7 yr
rent often wins
$2,200 rent, 3% growth · $400k, 4% appr, 15 yr
buy often wins
How it works
Rent side adds 12 months of rent each year, growing by the annual increase. Buy side adds principal & interest, an annual property tax (on current home value), monthly home insurance, annual maintenance percent of home value, and HOA dues. Home value grows by the appreciation rate. At the end of the horizon, the calculator estimates sale proceeds (home value − loan balance − selling cost) and subtracts that from total out-of-pocket to get net buy cost.
Total rent · Σ rent × 12 + renter ins, with annual rent growth
Total buy out-of-pocket · down + Σ (P&I + tax + ins + maint + HOA)
Net sale · home value − loan balance − selling cost
Net buy cost = total out-of-pocket − net sale. Difference = net buy cost − total rent.
Related money calculators
- Mortgage calculator for monthly payment from price.
- Home affordability calculator for max-price from income.
- Down payment calculator for cash-to-close planning.
- Net effective rent calculator for advertised vs effective rent with concessions.
- Rent increase calculator for percentage-based rent changes.
- Inflation calculator for purchasing-power context.
- All money calculators.
Note. Rent vs buy is famously assumption-heavy. The calculator does not model investment opportunity cost of the down payment, tax benefits, PMI, lender fees rolled into closing, or the non-financial value of either option. Use it for directional thinking, not a verdict.
Frequently asked questions
No. The right answer depends on how long you'll stay, local rent vs price ratios, mortgage rates, appreciation, and your personal situation. Short stays generally favor renting due to transaction costs on buying and selling. Longer stays often favor buying as equity builds and mortgage interest tilts toward principal.
Time horizon, appreciation rate, and rent growth rate move the result the most. A 1 percentage point change in appreciation over 7 to 10 years can flip the answer either way. Maintenance and selling cost percentages also matter. The calculator surfaces every assumption so you can stress-test them.
No. The down payment could otherwise be invested for returns; that opportunity cost is real but hard to model honestly across markets. The calculator gives a straightforward out-of-pocket comparison so you can decide how to weight opportunity cost separately. Generally, higher expected investment returns make renting+investing look better.
Not modeled. Mortgage interest and property tax can be deductible if you itemize, but most filers take the standard deduction. Tax benefits also depend on jurisdiction (federal + state). For most middle-income filers, tax benefits are smaller than commonly assumed; for higher incomes in high-tax areas they can matter more.
Selling a home typically costs 5 to 7 percent of the sale price (agent commissions, closing costs, repairs, transfer taxes). On a $400k home that is $20k to $28k, paid from sale proceeds. If you sell soon after buying, this cost is a large share of any equity gained. Short horizons + selling costs = renting often wins.
Closing costs at purchase (2 to 5 percent of price) are real and usually paid in cash on top of the down payment. This calculator does not split them out, but you can add them to the down payment field to fold them in. Selling cost at the end of the horizon is modeled.
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