Rent vs Buy Calculator

Rent vs buy calculator for comparing monthly costs and long term outcomes

The rent vs buy decision is usually not about a single number like the mortgage payment. It is a mix of cash flow, risk, flexibility, and what happens to your money over time. This calculator compares renting and buying by simulating monthly cash flows over your chosen time horizon, then estimating what your net worth could look like at the end under each option.

On the buying side, it includes a standard mortgage payment estimate, property tax, insurance, maintenance, and HOA or levies. It also tracks home value changes using your appreciation input and estimates what you might take home after selling costs. On the renting side, it grows rent each year by your rent increase input and treats the renter as investing the upfront cash they did not spend on a down payment and buying costs.

The main output is not a guarantee. It is a structured comparison that makes your assumptions visible. If a small change in inputs flips the result, that tells you the decision is sensitive and you should be cautious about relying on a single forecast. Use this to explore scenarios, not to predict the future.

Assumptions and how to use this calculator

• The mortgage uses a fixed interest rate and a fixed monthly payment based on your loan term.
• Home value appreciation and investment return are applied as smooth monthly growth rates derived from your annual inputs.
• Property tax and maintenance are modeled as a percent of home value and move up as the home value changes.
• Buying closing costs are treated as an upfront percent of the home price. Selling costs are applied at the end as a percent of the sale price.
• If one option is cheaper in a given month, the calculator assumes the cheaper option invests the difference. It does not model debt for negative investment balances.

Common questions

What does “net worth” mean in the results?

Net worth here is a simplified end-of-horizon snapshot. For renting, it is the value of the investment account (starting with the avoided down payment and closing costs, plus any monthly savings). For buying, it is your estimated home equity after selling costs plus any invested monthly savings if buying is cheaper than renting in some months.

Why can renting win even if the home goes up in value?

Buying has multiple costs beyond the mortgage: taxes, insurance, maintenance, levies, and transaction costs. If those costs are high, or if the investment return is strong, investing the upfront cash and monthly savings can outgrow the home equity over your time horizon, especially for shorter horizons.

Why can buying win even if rent feels “cheaper” today?

Rent often increases over time, while a fixed-rate mortgage payment stays stable (even though taxes and maintenance may rise). Over longer horizons, principal repayment and home appreciation can build equity that a renter does not build, depending on your assumptions.

How should I pick a time horizon?

Use a horizon that matches how long you realistically expect to stay in the home. Transaction costs can dominate short horizons, so a 3 to 5 year horizon often favors renting unless appreciation is strong. A 7 to 15 year horizon can change the answer materially.

Does this include taxes, tax deductions, or inflation?

No. This version keeps the comparison broadly applicable and easy to use. Tax impacts, inflation-adjusted returns, and personal circumstances can be significant. If you want a more conservative view, lower the appreciation and investment return inputs and increase maintenance and selling costs.