Rent vs Buy Calculator
Compare renting and buying using mortgage amortization, home appreciation, rent growth, ownership costs, selling costs and opportunity-cost investing.
- Tracks mortgage balance and home equity over time
- Invests the lower-cost option’s monthly cash-flow advantage
- Includes down payment, closing costs and selling costs
Calculator workspace
Change any assumption and recalculate. Your entries stay in this browser unless you choose to share or copy a result.
What this Rent vs Buy Calculator calculates
Rent-versus-buy comparisons can be misleading if they compare rent with a mortgage payment and ignore everything else. This model tracks a fixed mortgage balance month by month, updates home value and rent, includes property tax, insurance, maintenance and HOA, and accounts for purchase and sale transaction costs. It also treats the buyer’s upfront cash as an opportunity cost by investing that amount on the renter side.
The result is intentionally more than a single number. Supporting figures are shown beside the headline answer so you can see which part of the calculation is driving the outcome. This makes the tool useful for scenario testing: change one assumption, calculate again, and compare the supporting values rather than relying on a black-box result.
Formula and calculation method
Compare ending net worth after monthly mortgage amortization, home-value/rent growth, selling cost and investment of each option’s cash-flow advantage.
Inputs are validated before calculation and the arithmetic runs locally in the browser. Monetary fields use the selected currency only for display formatting. The calculator does not retrieve bank, payroll, property, medical, market or exchange-rate data from an external service.
How to use it
- Enter values that describe the same scenario and reporting period.
- Keep percentages and units consistent with the labels shown beside each input.
- Select Calculate and review both the headline result and the supporting metrics.
- Change one assumption at a time to understand sensitivity instead of accepting a single scenario.
- Use Copy Result, Share Result or Save Result Image when you need to keep a record of the calculation.
Worked example
Enter a 450,000 home with 20% down, a 30-year mortgage at 6.5%, and a seven-year holding period. Add property tax, insurance, maintenance, expected appreciation, comparable rent, rent growth, and a reasonable investment return. The result compares projected ending wealth rather than simply comparing the first month’s payment.
How to interpret the result
The headline difference tells you which scenario is ahead under the assumptions, not which choice is universally better. Small changes in holding period, appreciation, rent growth, transaction costs or investment return can reverse the result. Use the calculator as a sensitivity tool: change one assumption at a time and look for the conditions under which the decision changes.
For an important decision, compare the output with original documents, lender or employer terms, supplier information, professional guidance, or other authoritative records relevant to the calculation. Small differences in rates, timing, fees and definitions can materially change a result even when the formula itself is correct.
Important assumptions and limitations
The model does not include income-tax deductions, capital-gains tax, mortgage insurance, renovation costs, utilities, financing changes, refinancing, rent deposits, renter insurance, or irregular maintenance. Investment returns and home appreciation are modeled as smooth rates, while real markets are volatile. The result is a scenario comparison, not a forecast.
This calculator is for planning, checking, education and general informational use. It is designed to make assumptions visible and calculations reproducible, but it does not replace a contract, disclosure, professional opinion, medical assessment, accounting policy or lending decision.
Frequently asked questions
Why is the down payment invested on the renter side?
Because renters retain cash that buyers commit to the property. Treating it as investable makes the opportunity-cost comparison more balanced.
Does principal count as a buying cost?
The full mortgage payment is a cash outflow, but principal also reduces the loan balance and therefore appears in home equity at the end.
What holding period should I use?
Use the period you realistically expect to keep the property; transaction costs make short holding periods especially sensitive.