Rent vs Buy Calculator

Renting and buying create different cash flows, different upfront costs, and different exit choices. This calculator compares them as two modeled net positions over the time horizon you enter. The renter path begins by investing the buyer's modeled upfront cash and adds any monthly cost difference when renting is cheaper. The buyer path combines home equity after a modeled sale cost with a separate investment account when buying is cheaper month to month.

That approach is more useful than comparing one rent payment with one mortgage payment because it forces the timing and costs into the open. It is still not a forecast or a verdict. Your move date, local market, actual rent, home condition, property taxes, insurance, financing, liquidity needs, and risk tolerance can make a real decision differ from this scenario.

For buying, the page calculates principal and interest from the selected mortgage, then adds property tax, insurance, HOA, maintenance, and a simplified optional tax field. At the chosen horizon, it projects a home value using the appreciation assumption, subtracts the modeled remaining mortgage balance and selling cost, and adds any buyer-side investment account.

For renting, the page models rent growth and renters insurance. The renter's portfolio begins with the down payment plus closing costs that the buyer would have paid, and receives the monthly difference whenever renter costs are lower. Both portfolios grow monthly at the investment-return input. The comparison is only as reliable as those assumptions, so every one is editable.

Consider a $300,000 purchase with a $60,000 down payment and 3% modeled closing costs. The buyer's upfront cash is $69,000. If a renter instead starts with $69,000 and the scenario assumes a 5% annual investment return compounded monthly, that starting amount grows to about $88,071 after five years before any monthly cost differences are added. The calculation is $69,000 × 1.05⁵.

The buyer side needs separate inputs: mortgage balance, property tax, insurance, maintenance, appreciation, and eventual selling cost. The example does not claim that either path will produce that return or that the property will appreciate. It shows why a comparison should not quietly discard the down payment, closing costs, or the selected time horizon.

Listing price and mortgage principal-and-interest are only part of a buy scenario. This page provides fields for property tax, insurance, HOA, maintenance, closing costs, and selling costs so they can be inspected one by one. The CFPB's home-buying cost overview similarly emphasizes that borrowing costs, fees, and property-related costs matter beyond the listing price.

The calculator cannot know the actual inspection findings, repairs, special assessments, local taxes, insurance changes, landlord responsibilities, moving costs, utility differences, or sale transaction details. Replace default-looking fields with sourceable local estimates and rerun the horizon when those facts change.

Home appreciation, rent growth, and investment return are powerful because they compound over time. They are also uncertain. Entering a higher value can make either path look better without proving it will happen. The most honest use of the page is to run conservative, middle, and adverse assumptions over a horizon that matches your likely plan, then see whether the conclusion flips easily.

The optional mortgage-interest tax field is especially limited. It applies a user-entered percentage to modeled mortgage interest. It does not establish whether a household itemizes, qualifies for a deduction, has a taxable benefit, or faces a jurisdiction-specific rule. Leave it at zero if you do not have a confirmed reason to model it, and seek tax guidance for an actual filing question.

1. Pick a time horizon based on your real flexibility and likely move timing, not the result you hope to see.
2. Enter rent and ownership costs from current local records or quotes.
3. Write down the source and date for appreciation, rent-growth, and return assumptions.
4. Run the same scenario with lower appreciation and investment-return assumptions and higher ownership costs.
5. Use the Home Affordability Calculator and Mortgage Calculator for their separate budgeting and payment checks.

Report unclear math or wording through the page's issue form using non-sensitive sample numbers. Do not include an address, tax return, account details, or private offer.