Rent vs. Buy Calculator

How the comparison is built

Buying and renting are hard to compare because their costs and benefits arrive in different forms. This calculator nets everything down to a single number on each side over the years you plan to stay. On the owning side it totals the down payment, all mortgage payments, property taxes and maintenance, then subtracts the two things that give value back: the equity you build as the loan is paid down and the gain from the home appreciating.

On the renting side it sums the rent you pay, growing it each year by the increase you specify. Whichever total is lower is the cheaper path over that horizon.

Reading the result

The chart places the net cost of owning beside the cumulative cost of renting. The shorter bar wins for your chosen number of years, and the recommendation reflects that.

Time horizon is decisive. Buying carries large upfront and fixed costs that take years to be outweighed by equity and appreciation, so a short stay usually favours renting while a longer one tends to favour buying. Nudging the years field is the quickest way to find your break-even point.

Assumptions that move the answer

Small changes in the inputs can flip the recommendation, so test a range.

• Home appreciation and rent increases are estimates of the future, not facts — try optimistic and pessimistic values.
• A higher mortgage rate or property tax pushes the math toward renting.
• The model does not credit you for investing the down payment if you rent instead, which can understate renting’s appeal.
• It also omits buying and selling transaction costs, which raise the true cost of a short ownership period.

Limitations

This is a simplified financial comparison and ignores lifestyle factors, the value of flexibility, and tax effects that vary by jurisdiction. The result shown is net of equity and appreciation, as the on-page note explains. Treat it as a directional guide, not a decision in itself. This is general information, not financial advice.

Formula

owning = P&I + taxes + maintenance − equity built − appreciation; renting = Σ rent growing yearly

Frequently asked questions

How is the buying cost worked out?

It totals your principal and interest payments, property taxes and maintenance over the period, then subtracts the equity you build and the gain in the home value.