This calculator is for informational purposes only and does not constitute financial advice. Results are estimates based on inputs you provide. Consult a qualified financial advisor before making financial decisions.
Rent vs. Buy Analyzer
Compare the total cost of renting vs buying over time.
Buying Costs
Renting Costs
Expected return on investing the difference.
Breakeven Point
Net Worth Comparison
Whether to rent or buy is rarely just a math question, but the math matters. The most common mistake in rent-vs-buy comparisons is ignoring opportunity cost: money tied up in a down payment can't compound in the stock market. A real comparison accounts for that.
What a real rent-vs-buy comparison includes
Buying costs include mortgage payment, property tax, insurance, maintenance (typically 1-2% of home value annually), HOA, and closing costs to sell (~6-8%). Renting costs include rent and renters insurance. The crucial extra: opportunity cost on the down payment. If you'd otherwise invest that money, factor in 6-7% annual real returns. The result is a true monthly cost comparison.
When to use this calculator
Use it before any home purchase decision, especially in expensive cities where price-to-rent ratios are high (above 20:1 typically favors renting). The breakeven horizon is typically 5-7 years; under that, transaction costs and forgone investment returns usually make renting win financially. Above 7-10 years and the math often flips.
Worked example
A $500,000 home with 20% down vs renting an equivalent property for $2,500/month. Buying: ~$3,800/month total carrying cost. Renting: $2,500 + lost compound return on the $100,000 down payment (~$580/month at 7%). Net cost gap: about $720/month, in favor of renting. The home needs to appreciate roughly 1.7%/year just for buying to break even financially.