Rent vs. Buy Calculator
The honest comparison: total rent paid (rising each year) versus the true net cost of owning — payments, ownership costs, and both ends' transaction costs, credited back with the equity you'd walk away with at sale.
Rent vs. buy over your horizon
Example: $2,000 rent vs. a $350,000 home, 7 years → buying cheaper by $53,198.
What actually gets compared
Renting's cost is straightforward: every rent check over the horizon, rising a little each year. Buying's cost is subtler — the down payment, every mortgage payment, and ownership costs go out, but at the end you sell the (appreciated) home, pay the selling costs, retire the remaining loan, and keep the equity. In the worked example — $2,000 rent versus a $350,000 home held 7 years — renting costs $183,899 all-in, while buying nets out to $130,701 after walking away with $149,416 of sale proceeds: buying comes out ahead by $53,198. Every figure is computed by the same tested engine as the calculator above.
The horizon is the hinge
Drop the same example to a two-year stay and the verdict flips — transaction costs at both ends and interest-heavy early payments overwhelm two years of equity and appreciation. The break-even for buying typically sits several years out, moving with rates, rents, and appreciation. If your honest horizon is short or uncertain, rent without guilt; if it's long, the math usually — not always — rewards owning.
Stress-test the appreciation
Appreciation does heavy lifting in any pro-buying result. Re-run the comparison at 0–1% appreciation before deciding: a purchase that only wins with 4%+ annual growth is a market bet, not a housing decision. The other inputs worth pressure-testing are ownership costs (older homes run higher) and how long you'll really stay.
Frequently asked questions
Why does how long I stay matter so much?
Buying carries heavy fixed costs at both ends — closing costs going in, roughly 5–7% of the sale price coming out — plus early mortgage payments that are mostly interest. Those costs amortize over your stay: spread across seven years they are manageable; concentrated into two, they usually swamp any equity built. That is why short horizons favor renting almost regardless of the market.
What are typical ownership costs?
Property tax, homeowners insurance, maintenance, and any HOA dues — commonly estimated at 1.5–3% of the home’s value per year combined, varying a lot by state and property age. This calculator takes that as an annual percentage of the (appreciating) home value, which is the standard planning approach.
Does this account for what my down payment could earn elsewhere?
Not directly — that opportunity cost is real but depends on assumptions about market returns and your discipline to actually invest the difference. If you want to include it, mentally add what your down payment would have earned in your alternative investment to the cost of buying — our sister site RetireCalculator.net has an Investment Calculator for exactly that scenario.
Is the cheaper option always the right one?
No. Renting buys flexibility; owning buys stability, control, and a forced savings mechanism. The calculator prices the financial half of the decision so you can weigh the rest — job mobility, family plans, how much you value putting holes in your own walls — with clear eyes about what each path costs.
Not financial advice: a general educational comparison that excludes income taxes, mortgage-interest deductions, PMI, and the invested-elsewhere value of your down payment. Actual costs vary by market. Values are processed locally in your browser and never transmitted. See the methodology page.