Rent vs. Buy Calculator
Compare the real net cost of renting and buying over the years you actually plan to stay, all assumptions shown on screen.
How this calculator works
This calculator adds up every real dollar on each side over the years you choose, then nets out what you'd get back. On the buy side: down payment, closing costs, mortgage principal and interest, property tax, insurance, HOA, and maintenance, all added up, then the home's equity at the end (its grown value minus whatever mortgage balance is left, minus selling costs) is subtracted off, since that's the money you'd actually walk away with if you sold. On the rent side: total rent paid (growing each year at the rate you enter), minus the growth you'd get by investing the down payment instead of spending it (since a renter never ties that cash up in a house). The result is a net cost for each path. Lower is cheaper over that specific number of years. This is a pure cost comparison, not advice about which to choose, and every number feeding it is shown on screen so you can see exactly what's being assumed.
Worked example
Renting at $1,800/month (growing 3% a year) versus buying a $350,000 home with 10% down at 6.5% over 30 years, 1.1% property tax, $1,500/yr insurance, 1% maintenance, 3% home appreciation, a 6% investment return on the down payment, 3% closing costs at purchase and 6% selling costs at the end, compared over 7 years: renting nets out to about $147,882, buying to about $159,747 (including $10,500 in closing costs and $25,827 in selling costs on the home's then-value of $430,456), meaning renting comes out about $11,865 cheaper over that stretch in this example. The closing and selling costs are exactly why: without them buying would look about $24,463 cheaper instead, which is a real cost that a simple rent-vs-buy comparison can't skip.
Frequently asked questions
Why does the number of years matter so much?
Buying has large upfront costs (down payment plus closing costs) that take years to "pay back" through equity and appreciation, so a short stay often favors renting while a long stay often favors buying. Change the years field and watch the net cost gap shift.
What costs does this leave out?
Moving costs and PMI aren't modeled, so a real transaction could add a bit more cost to the buy side than what's shown here. Closing costs (title, lender fees, inspections, etc.) and selling costs (agent commission, transfer taxes) are now included as the two editable percent fields above. Property tax and maintenance are both based on the home's current (growing) value, which is a simplification of how real assessments work.
Why would I invest the down payment if I'm renting?
This calculator assumes a renter puts the money they didn't spend on a down payment into some kind of investment instead, which is a common way rent-vs-buy comparisons account for opportunity cost. If you wouldn't actually invest that money, the real gap would look different, this is one assumption among several, all shown above.
Why do selling costs use the ending home value instead of the purchase price?
Because a real estate agent's commission and most transfer taxes are charged on the sale price at the time you sell, not what you originally paid. If the home appreciated, the selling cost in dollars goes up too, even though the percentage stays the same.
Assumptions & sources
- Closing costs (buy side) default to 3% of the purchase price, paid at purchase; selling costs default to 6% of the home's value at the end of the window, subtracted from the equity you'd walk away with. Both are editable; actual closing/selling costs vary by location and negotiation (see the Consumer Financial Protection Bureau's closing cost guidance for typical ranges).
- Property tax and maintenance are calculated as a percent of the home's current value each year, which grows at the home appreciation rate you enter.
- Insurance and HOA are held flat (no growth) for the whole period, a simplification.
- Mortgage payment (P&I) uses the standard fixed-rate amortization formula; no new financing or refinancing is modeled.
- Investment growth on the down payment uses compound annual growth at the rate you enter; it does not model taxes on investment gains.
Educational estimates, not financial advice.