Rent vs Buy Calculator
See whether renting or buying leaves you better off after a set number of years.
How the comparison works
Buying builds equity as the mortgage is paid down and the home may rise in value, but it comes with taxes, insurance, repairs and large costs to buy and sell. Renting avoids those, and lets you invest the down payment and any monthly savings instead.
The calculator follows both paths month by month, then compares the net worth you end up with: the home’s value after selling costs minus the loan, against the invested money.
Example
Buying a 400,000 home with 20% down at 6.5%, against renting for 2,000 a month (rising 3% a year) and investing the difference at 5%, leaves the renter about 20,100 ahead after 10 years (254,200 against 234,000). Buying does not catch up within 10 years on these assumptions, so test a longer period or higher price growth.
What it leaves out
Taxes on investment gains, the mortgage interest deduction, and personal factors such as stability or the freedom to move. The answer is very sensitive to home price growth, rent increases and the length of time, so test several values.
Frequently asked questions
How long do I need to stay for buying to win?
Often five to seven years or more, because buying and selling costs are large. The table shows the year when buying pulls ahead.
Is renting throwing money away?
No. Rent pays for a service, just as ownership costs such as interest, tax and repairs do. The comparison shows which costs more overall.
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