Rent vs buy calculator guide
This calculator compares renting with buying by looking at cash flow, home equity, home appreciation, mortgage balance, and the opportunity cost of investing the down payment instead of using it to buy a home.
How to use it
- Enter your current rent and expected annual rent increase.
- Enter the home price, down payment, mortgage rate, and loan term.
- Choose how many years you expect to stay in the home.
- Use conservative assumptions for home appreciation and investment return.
Calculation method
Buyer value is estimated as future home value minus remaining mortgage balance. This is a planning estimate and does not include every local transaction cost.
Example scenario
If buying has a higher monthly cost but builds meaningful equity, buying may win over longer periods. If the stay period is short, renting can win because it avoids transaction costs and keeps the down payment invested.
What to watch
Small changes in home appreciation, mortgage rate, rent growth, and investment return can change the result. Use this as a comparison model, not as a guaranteed housing recommendation.
FAQ
Is buying always better long term?
No. Buying can be better when you stay long enough and the home appreciates, but high rates or high ownership costs can make renting stronger.
What is the biggest assumption?
Usually home appreciation and investment return. Both are uncertain and should be tested with conservative values.
Does this include taxes?
Only as part of a broad annual ownership cost percentage. It is intentionally not a tax-specific calculator.