Rent vs Buy Calculator
Use this rent vs buy calculator to compare a modeled home-buying path with a modeled rent-and-invest path over the same time horizon.
The main result is an estimate of your financial position after the years you select, not a guaranteed savings claim or a categorical recommendation.
It is built as a planning tool. The comparison is especially sensitive to time horizon, home appreciation, rent growth, investment return, and transaction costs such as closing and selling expenses.
Results are planning estimates only. This comparison can include property tax, closing costs, selling costs, and a simplified PMI estimate if applicable, but it does not model income taxes, utilities, inflation adjustments, variable returns, major repairs, or lender-specific fees and rules.
Estimated financial position after the selected horizon
Planning comparison, not financial advice
$19,049.86
Renting may come out ahead by $19,049.86 over the selected horizon.
No break-even point appears within this horizon under the assumptions on the page.
- Estimated buy position
- $185,310.01
- Estimated rent position
- $204,359.87
- Total rent paid
- $220,678.91
- Ownership cash outflows before selling
- $362,718.63
- Remaining loan balance
- $307,415.23
- Estimated home value
- $524,175.79
- Estimated equity after selling costs
- $185,310.01
In this scenario, estimated buy position matches equity after selling costs because buying does not create an extra investable monthly cash-flow surplus.
Estimated rent position is the modeled investment value of unused upfront cash plus any monthly savings difference on the rent side: $204,359.87.
Ownership cash outflows before selling include down payment, closing costs, mortgage payments, taxes, insurance, HOA, maintenance, and PMI if used. Selling costs are reflected separately in estimated equity after selling costs.
Across 7 years, buying builds an estimated financial position of $185,310.01 versus $204,359.87 for renting, based on your inputs for home costs, rent growth, appreciation, and investment return.
Key assumptions to watch
- The result is highly sensitive to time horizon, home appreciation, rent growth, investment return, and transaction costs.
- Property tax, insurance, HOA, and maintenance stay flat in dollar terms in this version unless you rerun the scenario with different inputs.
- The main comparison is estimated financial position after 7 years, not a categorical recommendation to rent or buy.
This is a planning tool only. It compares a modeled buy path with a modeled rent-and-invest path using the assumptions on the page. It is not a lender quote, housing recommendation, or financial advice.
How to use this calculator
- Enter the home price, down payment, mortgage rate, loan term, monthly rent, and the number of years you want to compare.
- Open Advanced assumptions to set property tax, insurance, HOA, maintenance, closing costs, selling costs, appreciation, rent growth, and investment return.
- Review the estimated financial position for both paths and the neutral summary showing which path may come out ahead under the selected horizon.
- Check the break-even estimate, then look at the supporting stats such as total rent paid, ownership cash outflows before selling, remaining balance, home value, equity, and the renting path's investment value.
- Rerun the comparison with different time horizons and assumption sets. This page is most useful when you compare a conservative case, a base case, and a more optimistic case rather than relying on one scenario.
How it works
This calculator compares two planning paths over the same time horizon: buying a home and selling at the end of that horizon, or renting and investing the cash that stays available.
It is designed as an estimate-based comparison, not a recommendation engine, so the main output is the estimated financial position each path may leave you with under the assumptions you enter.
Main comparison framework
Estimated financial position = housing-related assets at the horizon + invested savings difference created by the path
Main inputs in the estimate
- Buy path
- Down payment, closing costs, mortgage payment, taxes, insurance, HOA, maintenance, appreciation, selling costs, and remaining loan balance
- Rent path
- Monthly rent with annual growth plus investment growth on unused upfront cash and any monthly savings difference
- Horizon
- The number of years you expect to stay before comparing the estimated ending positions
What the estimate assumes
- The primary metric is estimated financial position after the selected horizon, not a categorical recommendation to rent or buy.
- Home appreciation and investment growth are modeled using steady rates, while property tax, insurance, HOA, and maintenance stay flat in dollar terms in this version.
- Selling costs are applied at the end of the horizon before equity is compared with the renting path's investment balance.
- If estimated PMI is enabled below 20% down, this version uses a simple benchmark estimate rather than lender-specific pricing.
Assumptions and limitations
- This calculator is a planning estimate only and not financial, mortgage, or housing advice.
- The main comparison is estimated financial position after the selected horizon, not a guaranteed savings amount or a categorical recommendation.
- The model assumes a fixed-rate mortgage, steady home appreciation, steady investment return, and annual rent increases at the rates you enter. Home appreciation and investment return are applied as steady monthly growth assumptions, while rent increases are applied once every 12 months.
- Property tax, homeowners insurance, HOA dues, and maintenance are held flat in dollar terms in this version rather than automatically increasing each year.
- Selling costs are applied when the home is assumed to be sold at the end of the horizon.
- If estimated PMI is enabled below 20% down, this page uses a simplified benchmark estimate rather than lender-specific PMI pricing and cancellation rules.
- Taxes, inflation, utilities, repairs above your maintenance estimate, and major life changes are not modeled in this version.
Example scenario
Use this example to see why a rent-versus-buy comparison can change meaningfully when the horizon or assumptions move.
- Home price:
$425,000 - Down payment:
$85,000 - Mortgage rate:
6.5% - Loan term:
30 years - Property tax:
$5,100per year - Home insurance:
$1,800per year - HOA:
$125per month - Maintenance:
$4,200per year - Closing costs:
$9,000 - Selling costs:
6% - Home appreciation:
3% - Monthly rent:
$2,400 - Rent increase:
3% - Investment return:
6% - Time horizon:
7 years
In this setup, the calculator estimates two ending positions rather than declaring a universally correct answer. The buy path reflects mortgage amortization, ownership costs, appreciation, and selling costs at exit. The rent path reflects growing rent plus the value of investing the upfront cash that was not used for a down payment and closing costs, along with any monthly cash-flow advantage.
That structure makes the page more useful for planning than a simple payment-only comparison. A short horizon can make transaction costs dominate. A longer horizon can give appreciation and principal paydown more time to matter. Changing appreciation, rent growth, or investment return assumptions can also shift the estimate substantially, which is exactly why this page should be used as a benchmark-based planning tool rather than a buy-or-rent decision engine.
Frequently asked questions
What does this rent vs buy calculator actually compare?
It compares two modeled paths over the same time horizon. The buy path includes upfront cash, mortgage payments, taxes, insurance, HOA, maintenance, appreciation, remaining loan balance, and selling costs at the end. The rent path includes monthly rent with annual growth and an investment account for upfront cash not used on buying plus any monthly savings difference.
Is the result telling me whether I should rent or buy?
No. This page is a planning tool, not financial advice. It shows how the comparison may look under the assumptions you enter. A different horizon, appreciation rate, rent growth rate, investment return, or transaction cost estimate can change the result materially.
What is the main output on this page?
The primary metric is the estimated financial position after your selected horizon. For buying, that means estimated equity after selling costs plus any invested monthly savings if buying is cheaper than renting. For renting, that means the estimated value of investing unused upfront cash and any monthly savings if renting is cheaper.
How is break-even estimated?
Break-even is the first modeled month where the estimated buy position is at least as high as the rent position. If that never happens within the selected horizon, this calculator shows that no break-even appears in that period.
Does this calculator include PMI?
It can include a clearly labeled benchmark PMI estimate when the down payment is below 20 percent. That estimate is simplified and does not reflect lender-specific PMI pricing or cancellation rules.
Why can short horizons favor renting even if buying builds equity?
Buying usually involves meaningful upfront and exit costs. When the horizon is short, appreciation and principal paydown may not fully offset closing costs, selling costs, and the higher monthly ownership expenses.
How are appreciation, rent growth, and investment return modeled?
Home appreciation and investment return are entered as annual rates, then applied as steady monthly growth assumptions inside the model. Rent growth is entered as an annual rate and applied once every 12 months. Because of that timing difference, a rough hand calculation using one simple annual growth step may not match this page exactly.
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