Rent vs Buy Calculator
Compare the true net cost of renting against buying over your actual time horizon, including equity, appreciation, and opportunity cost.
Your details
Buying
Assumptions
This calculator runs entirely on your device. Nothing you enter is uploaded, stored, or sold. How this works
Renting wins over 7 years
$92,345
Net cost: buying $138,223 vs renting $45,878
Includes your inputs, the full breakdown, and every row of the table.
Home value at sale
$572,526
$532,449 after 7.0% selling costs
Equity recovered
$206,950
Remaining balance $325,498
Total rent paid
$203,689
Renter's portfolio
$259,061
Down payment + monthly savings, invested
- Buying — cash out of pocket
- $345,173
- Buying — equity recovered at sale
- - $206,950
- Buying — net cost
- $138,223
- Renting — total rent + insurance
- $203,689
- Renting — investment gains
- - $157,811
- Renting — net cost
- $45,878
What this means
- Renting stays ahead for the full 7-year horizon at these assumptions.
- The comparison assumes the renter invests both the down payment and any month where owning costs more than renting. Changing the investment return is the single biggest lever in this model.
How the rent vs buy calculation works
The rent-versus-buy question is not about throwing money away. Renters pay rent; owners pay mortgage interest, property tax, insurance, maintenance, and transaction costs. Neither of those builds equity. What actually decides the question is how those non-recouped costs compare, and what the renter does with the cash they did not tie up in a down payment.
Time horizon dominates the result. Buying costs roughly 2-3% of the price to enter and 6-8% to exit, so a purchase generally needs five to seven years of appreciation and principal paydown just to clear its own transaction costs. Below that horizon, renting almost always wins unless the local rent-to-price ratio is unusually high.
Frequently asked questions
Why does the renter get an investment portfolio in this model?
Because the money is real. A buyer sinks a down payment and closing costs into the house; a renter can invest that same amount. Ignoring it flatters buying. The model also invests any month where owning costs more than renting.
What appreciation rate should I use?
US home prices have historically tracked slightly above inflation, roughly 3-4% nominally over long periods, though individual markets vary wildly. Running the calculator at 2% and 5% shows how sensitive the answer is.
Related calculators
Mortgage Calculator
Estimate your full monthly payment including taxes, insurance, PMI, and HOA — plus total interest and an amortization schedule.
Real EstateHome Affordability Calculator
Work backwards from your income, debts, and down payment to the maximum home price a lender will approve.
Real EstateRental Cash Flow Calculator
Underwrite a rental property: monthly cash flow, cap rate, cash-on-cash return, and the 1% rule.
Real Estate15 vs 30 Year Mortgage Calculator
Compare the payment, the total interest, and what happens if you take the 30 and invest the difference.
Real EstateSpotted a problem, or want this calculator to do more?Corrections are fixed first, and the most-requested features get built next.Tell us →
Disclaimer. This calculator is provided for general information and educational purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Results are estimates based on the inputs you provide and the assumptions described above. Confirm any figure with a qualified professional before acting on it.