Rent vs Buy Calculator
Compare the true total cost of renting vs buying over time — including opportunity cost, maintenance, taxes, and home appreciation.
Buying often wins long-term, but only after 5–7 years. A $400,000 home with 10% down at 7% mortgage rate has a total monthly cost of ~$3,400 including taxes and maintenance — compare this to your rent to see which option wins at your time horizon.
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Rent vs Buy Calculator
Home price · Down payment · Mortgage rate vs Monthly rent · Years to compare
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Buying scenario
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Renting scenario
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After 10 years
Buying
Monthly mortgage payment
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Total monthly cost (incl. taxes)
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Total cash out
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Home value at end
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Net equity (home − mortgage)
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Net cost (cash out − equity)
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Renting
Starting monthly rent
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Final year monthly rent
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Total rent paid
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Down payment grown (invested)
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Net cost (rent − investment gain)
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How it's calculated
True total cost comparison: buying vs renting
Buying net cost = Total cash out − Net equity gained
Cash out = Down payment + Closing costs + Mortgage payments
+ Taxes & maintenance − Mortgage principal reduction
Net equity = Home value − Remaining mortgage
Renting net cost = Total rent paid − Investment gain on down payment
Total rent = sum of monthly rents (growing at rent increase rate)
Opportunity cost = Down payment × (1+invest_rate)^years − Down payment
- Opportunity cost
- The return you forgo by using your down payment for a home instead of investing it. Critical to include for a fair comparison.
- Price-to-rent ratio
- Home price ÷ annual rent. Under 15 favors buying; above 20 may favor renting.
- Break-even point
- The number of years after which buying becomes cheaper than renting on a net basis.
Disclaimer: simplified model. Does not include all tax implications (mortgage interest deduction, capital gains exclusion), closing costs, or the emotional/lifestyle value of ownership. Consult a financial adviser and real estate professional for your specific situation.
Frequently asked questions
Is it better to rent or buy?
Depends on: time horizon (shorter favors renting), local price-to-rent ratio, down payment opportunity cost, and expected appreciation. In most US markets, buying wins after 5–7 years. In high-cost cities with P/R ratios of 25+, renting can win even long-term.
What costs do buyers miss?
Closing costs (2–5% of price), property taxes (~1.2%/yr nationally), homeowner's insurance, HOA fees, and maintenance (budget 1–2%/yr). Plus the opportunity cost of the down payment. These can add $1,000+/month to the true ownership cost.
What is the price-to-rent ratio?
Home price ÷ annual rent. Under 15: strong buy signal. 15–20: neutral. Over 20: renting may be better. San Francisco, NYC, Boston are often 25–40+. Midwest and South cities are often 10–15. Calculate yours: current rent × 12 = annual rent; divide into home prices in your area.
How much down payment do I need?
3% minimum for conventional loans (first-time buyers with strong credit); 3.5% for FHA loans; 20% to avoid PMI (Private Mortgage Insurance, typically 0.5–1.5%/yr). 20% down is ideal but not always required — run the numbers for your scenario.