How to use the Rent vs Buy Calculator
Enter the Comparison horizon (years), then add the purchase, loan, rent, and cost figures. It creates yearly rows with cash out, equity, net position, and the first year Buy net position reaches or exceeds Rent net position. The annual cash-flow difference grows at Alternative investment return (%/yr, optional).
How to compare renting and buying
- Enter Comparison horizon (years) and Alternative investment return (%/yr, optional).
- Enter Home price ($), Down payment (% of price), Mortgage rate (APR %), and Loan term (years).
- Add the buying fields for property tax, insurance, HOA, maintenance, closing costs, appreciation, and selling costs.
- Enter Monthly rent ($), then add Rent growth rate (%/yr, optional) and Renters insurance ($/yr, optional).
- Leave optional fields blank for defaults. Select Calculate, then read Sensitivity warnings. Copy result and Download result (.txt) appear with the result.
What the Rent vs Buy Calculator includes
The buying calculation pays the loan month by month and groups payments into yearly Buy cash out. Property tax and Maintenance use the home's value at the start of that year. Home appreciation changes modeled value; Selling costs reduce the value in Buy net position.
The renting calculation annualizes Monthly rent ($) and adds Renters insurance ($/yr, optional). Both balances grow at Alternative investment return (%/yr, optional). The higher cash outflow sends its difference to the other scenario's balance.
Inputs: Home price ($) 400000 | Monthly rent ($) 2200
Output: Year | Home value | Loan balance | Equity
Buy cash out | Rent cash out | Buy net position | Rent net positionRent vs Buy Calculator assumptions and limits
Required entries are Comparison horizon (years), Home price ($), Down payment (% of price), Mortgage rate (APR %), Loan term (years), and Monthly rent ($). The horizon accepts whole numbers 1 to 40; the loan term, 1 to 50. Home price and Monthly rent must be above 0. Ranges are Down payment 0% to 100%, Mortgage rate 0% to 25%, property tax and Maintenance 0% to 10%, closing and selling costs 0% to 20%, and Alternative investment return, Home appreciation, and Rent growth rate -10% to 20%.
Blank optional fields default to 6% investment return, 0% property tax, 0 for Homeowners insurance and HOA fee, 1% maintenance, 2% closing costs, 3% home appreciation, 6% selling costs, 3% rent growth, and 0 for Renters insurance. The model leaves out PMI, mortgage-interest tax deductions, and capital-gains tax on a sale. It does not fetch live market data. Calculations run in the browser; Copy result uses the clipboard and Download result (.txt) creates a text file.
Examples of rent vs buy comparisons
For a lease renewal, enter Monthly rent ($), Rent growth rate (%/yr, optional), the down payment, financing terms, and transaction costs. The table uses the same Comparison horizon (years).
For a planned move, test Home appreciation (%/yr, optional), Selling costs (% of sale price, optional), and a shorter horizon. Sensitivity warnings can flag high transaction costs, an aggressive return assumption, or no break-even within the selected years.
When to use a related financial calculator
Use the Financial Calculators category for another kind of estimate. Choose the Mortgage Calculator for a fixed-rate payment, ownership costs, or extra-principal payoff. Choose the House Affordability Calculator when income and debts should determine an affordable price. Use the Down Payment Calculator for a required down payment or monthly savings plan.
Frequently asked questions
How does a rent vs buy calculator compare the two options?
The renter's starting investment equals the buyer's down payment plus closing costs. Each year, the calculator compares Buy cash out with Rent cash out, grows both balances, and adds the difference to the scenario with the lower cash outflow. It then reports both estimated net positions.
What does break-even mean in the rent or buy calculator?
Break-even is the first year when Buy net position reaches or exceeds Rent net position. If it never happens within Comparison horizon (years), the result says Not reached.
Does the renting vs buying calculator use live rates or prices?
Home price, Monthly rent ($), Mortgage rate (APR %), Home appreciation (%/yr, optional), Rent growth rate (%/yr, optional), and Alternative investment return (%/yr, optional) come from your entries. The calculator does not query live rates or prices.
What does the rent vs buy calculator leave out?
The model leaves out PMI, mortgage-interest tax deductions, and capital-gains tax on a home sale. Its output uses the assumptions you enter and the formulas shown in the result.
Why does the buy result include a side investment?
The buyer receives a side-investment balance in years when Buy cash out is lower than Rent cash out. The renter receives the difference when Rent cash out is lower, and both balances grow at Alternative investment return (%/yr, optional).