Rent vs Buy Calculator
Should you rent or buy a home? Get a data-driven comparison of total costs, equity buildup, and net worth over any time horizon.
Compare Renting vs Buying a Home
How This Calculator Works
This calculator compares the net worth of buying vs renting over your chosen time horizon. For buying: home equity (home value minus remaining mortgage). For renting: the down payment invested in the stock market, plus any monthly savings from the lower rent cost.
True Cost of Homeownership
- Mortgage (P&I): Principal and interest payment — only principal builds equity
- Property Tax: Typically 1–2% of home value per year
- Homeowner's Insurance: ~0.5–1% per year
- Maintenance & Repairs: Budget 1–2% of home value per year
- PMI: Required if down payment < 20% — adds ~0.5–1% per year
- Closing Costs: 2–5% of purchase price (often ~3%)
- Selling Costs: 6% agent commissions + transfer taxes when you eventually sell
When Buying Makes More Sense
- You plan to stay in the home for 5+ years (time to recover closing costs)
- Local home appreciation rate outpaces your investment return
- Monthly mortgage is similar to or less than rent for comparable home
- You value stability, customization, and building equity over time
When Renting Makes More Sense
- Home prices are very high relative to rent (price-to-rent ratio > 20)
- You may relocate within 3–5 years
- Mortgage + costs significantly exceed comparable rent
- You can invest the down payment in higher-returning assets