Rent vs. Buy Calculator

Is it cheaper to rent or buy?

Buying isn't automatically "throwing money away on rent," and renting isn't automatically the cheaper choice. Which one wins depends on how long you stay, how much the home appreciates, what you'd earn investing the money instead, and how rent grows over time. This calculator compares the total net cost of each option over the years you plan to stay, so you can see the real trade-off rather than a gut feeling.

How the comparison works

The net cost to buy adds up your down payment, closing costs, mortgage payments, and ownership costs (property tax, insurance, and maintenance), then subtracts the net proceeds when you sell — your built-up equity plus appreciation, minus selling costs. The net cost to rent totals your rent over the same period (with annual increases) and subtracts what you'd earn by investing the cash you didn't tie up in a down payment. The lower net cost is the cheaper option for your situation.

The assumptions that matter most

• Years you'll stay — buying usually needs several years to overcome the upfront closing and selling costs. Short stays favor renting.
• Home appreciation — higher appreciation strongly favors buying; flat or falling prices favor renting.
• Investment return — the higher the return a renter can earn on the down-payment cash, the more attractive renting becomes.

Because small changes to these can flip the result, treat the output as a guide and test a few scenarios rather than trusting a single answer.

What this calculator simplifies

It assumes a 30-year mortgage, 3% closing costs to buy, 6% selling costs, and 3% annual rent growth. It doesn't model tax deductions, PMI, HOA dues, or the value of the stability and freedom that owning (or renting) can bring — those are personal factors worth weighing alongside the numbers.

FAQ

Why does renting sometimes win even long-term?

Because the down payment and closing costs, if invested instead, can grow substantially. In high-price, low-appreciation markets, that investment growth plus lower ownership costs can make renting cheaper even over many years.

Does buying build wealth even if it "costs more" here?

A mortgage is a forced savings plan — you build equity whether or not buying is the mathematically cheaper option. The calculator already credits that equity back, but the discipline of paying down a loan is a real-world benefit some renters don't replicate.

Should I include maintenance if I rent?

No — maintenance and property tax fall on owners, which is why they're in the buying side only. That's part of why the monthly cost of owning is usually higher than the mortgage payment alone.