How to use this rent vs buy calculator
Under Buying, enter the home price, down payment, mortgage rate, appreciation, property tax and maintenance. Under Renting, enter your monthly rent, expected rent increase, your investment return, and the years to compare. The analysis names a winner and shows the breakeven.
What makes a fair comparison
- Buying builds equity and benefits from appreciation, but carries closing costs, taxes, insurance and maintenance.
- Renting is flexible and lower-commitment — and frees up cash a disciplined renter can invest.
- Investing the difference is the key: comparing rent to a mortgage alone is misleading.
What this calculator includes — and what it doesn't
To keep the comparison clear and fast, this tool models the big drivers and leaves out some smaller or harder-to-predict costs. Here's exactly what's counted so you can read the result with the right context:
- Buying counts: your down payment, mortgage principal & interest, property tax and maintenance. Equity — your home's value minus the remaining loan balance — is treated as money back to you.
- Buying does not include: purchase closing costs, homeowners insurance, PMI, or selling costs (agent commission plus closing, often ~6–8% of the sale price). Because selling costs aren't subtracted, the buy side is a best case — what you'd actually pocket on a sale would be somewhat lower.
- Renting counts: your rent rising each year, and your down payment invested at the return you choose. For simplicity it does not separately model investing the month-to-month difference between renting and owning.
- Everything is an estimate. Appreciation, investment return and rent increases are assumptions you set — not guarantees. Real markets vary year to year.
Frequently asked questions
Is it better to rent or buy?
It depends on how long you stay, prices, rates, and what a renter earns investing the difference. The calculator compares both and finds the breakeven.
What is the breakeven point?
The year after which buying becomes cheaper than renting once equity, appreciation and a renter's investments are counted.
Why invest the difference?
A fair comparison credits the renter for investing the cash a buyer ties up rather than spends. This calculator invests your down payment at the return you choose; for simplicity it doesn't separately model investing the month-to-month difference. See what's included above for the full picture.
Related calculators & guides
This calculator is for educational and planning purposes only and provides estimates, not financial advice. Local markets vary widely. See how we calculate.