Rent vs Buy Calculator

Make an informed decision about whether to rent or buy a home by comparing the true total costs of each option over time.

Buying Costs
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Renting Costs
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General Assumptions
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Better Option: Buying

Estimated Savings over years

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Buying
Total Cost of Ownership
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Down Payment $0
Total Mortgage Payments $0
Property Taxes $0
Home Insurance $0
Maintenance & Repairs $0
HOA Fees $0
Closing Costs $0
Home Equity Gained -$0
Renting
Total Cost + Opportunity Cost
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Total Rent Payments $0
Renters Insurance $0
Investment Growth (Down Payment) -$0
Investment Growth (Difference) -$0

How This Calculator Works

This calculator provides a comprehensive comparison of the total costs of renting versus buying a home over your specified timeframe.

Buying Costs Include: Down payment, monthly mortgage payments (principal + interest), property taxes, home insurance, maintenance (typically 1% of home value annually), HOA fees, and closing costs. These are offset by home equity gained through mortgage principal payments and home appreciation.

Renting Costs Include: Monthly rent payments (with annual increases), renters insurance, and opportunity costs. The calculator accounts for investment returns you could earn by investing your down payment and the monthly difference between buying and renting costs.

Opportunity Cost: When renting, you can invest the money you would have used for a down payment and the difference between higher buying costs and lower renting costs. This calculator shows how those investments would grow.

Factors to Consider Beyond Financial Cost

  • Flexibility: Renting offers easier relocation; buying ties you to a location
  • Control: Homeowners can renovate and customize; renters cannot
  • Stability: Owning provides price certainty; rent can increase significantly
  • Responsibility: Homeowners handle all maintenance; landlords cover most repairs when renting
  • Tax Benefits: Homeowners may deduct mortgage interest and property taxes (consult tax advisor)
  • Market Risk: Home values can decrease; renters avoid this risk

Frequently Asked Questions

Is it always better to buy than rent?
No. Whether buying or renting is better depends on many factors: how long you plan to stay, local home prices vs. rents, your financial situation, mortgage rates, and personal preferences. In expensive markets or if you'll move within 3-5 years, renting often makes more financial sense.
What is the break-even point for buying vs renting?
The break-even point is typically 5-7 years, but varies greatly by market. This is when the total costs of buying (including transaction costs) equal the costs of renting plus investment opportunity costs. In high-cost markets, it can take 10+ years to break even.
Should I include tax benefits in this calculation?
This calculator doesn't account for tax deductions (mortgage interest, property tax deductions) because they vary greatly based on income, state, and whether you itemize deductions. After the 2017 tax reform, fewer homeowners benefit from these deductions. Consult a tax professional for your specific situation.
What is a reasonable home appreciation rate?
Historically, U.S. home prices have appreciated about 3-4% annually long-term, roughly matching inflation. However, this varies significantly by location and timeframe. Some markets see 5-7% annual growth, while others are flat or declining. Research your specific market's historical trends.
Why does the calculator include investment returns for renting?
When you rent, you can invest the money you would have used for a down payment, closing costs, and the difference between buying and renting costs. This "opportunity cost" is real money you could be earning. The calculator assumes you invest these amounts and earn returns based on your specified rate of return.
What if I can't afford 20% down?
You can adjust the down payment percentage in the calculator. With less than 20% down, you'll typically pay PMI (private mortgage insurance), which costs 0.5-1% of the loan amount annually. This makes buying more expensive until you reach 20% equity and can remove PMI.