Should you rent or buy? This free rent vs buy calculator compares the true net cost of each over the years you’ll stay — factoring in your down payment, mortgage, home costs and the equity you’d build.
Assumes a 30-year mortgage, ~3%/yr home appreciation and ~3%/yr rent increases.
Estimate only. Excludes closing/selling costs and the return you might earn investing a down payment.
How the Rent vs Buy Calculator Works
Comparing rent to a mortgage payment alone misses most of the picture. This calculator weighs the full net cost of buying — down payment, mortgage payments, and ongoing home costs, minus the equity you’d build — against the total rent you’d pay over the same years, to show which option actually costs less.
Formula: Net Cost to Buy = Down Payment + Total Mortgage Payments + Home Costs − Home Equity at the End (Home Value − Remaining Loan Balance). Net Cost to Rent = sum of each year’s rent, increasing roughly 3% per year. The calculator assumes a 30-year fixed mortgage, about 3%/year home price appreciation, and about 3%/year rent increases, then compares the two net costs over your Years Staying.
- Home price — the purchase price of the home you’re considering
- Down payment — the cash you’d put down upfront
- Mortgage rate — the annual interest rate on a 30-year fixed mortgage
- Home costs per year — property tax, insurance, and upkeep, entered as a percentage of home price
- Monthly rent — what you’d pay to rent a comparable place instead
- Years staying — how long you plan to stay before selling or moving
Example Scenarios
| Home Price | Down Payment | Rate | Home Costs/Yr | Monthly Rent | Years Staying | Cheaper Option (Net Savings) |
|---|---|---|---|---|---|---|
| $300,000 | $60,000 | 6.0% | 1.5% | $1,500 | 5 | Buying by ~$51,199 |
| $400,000 | $40,000 | 7.0% | 2.0% | $1,600 | 2 | Renting by ~$2,558 |
| $250,000 | $50,000 | 5.5% | 1.5% | $1,300 | 7 | Buying by ~$77,767 |
| $500,000 | $100,000 | 6.5% | 2.5% | $2,800 | 3 | Buying by ~$36,032 |
| $450,000 | $45,000 | 7.0% | 2.5% | $1,800 | 1 | Renting by ~$4,361 |
Assumptions That Swing the Rent vs Buy Calculator
A rent vs buy calculator balances many moving parts, and a handful of them decide the answer more than the rest.
- How long you stay. Buying and selling costs are paid up front and on exit, so short stays usually favour renting.
- Home price growth. A small change in the assumed rate makes a big difference over ten years or more, so test a low, middle and high value in the rent vs buy calculator.
- Rent increases. Rents tend to rise over time, and holding them flat flatters renting.
The other big factor is opportunity cost. Money tied up in a down payment could otherwise be invested; if the rent vs buy calculator does not model that return for you, weigh it yourself. The opportunity cost article on Wikipedia explains the idea.
Try your numbers several ways and look for the point where the rent vs buy calculator result flips from one side to the other. If small tweaks change it, lifestyle factors matter as much. Treat the rent vs buy calculator as a guide, not financial advice, since taxes and costs vary by country.
Rent vs Buy Calculator FAQ
What mortgage term does the rent vs buy calculator assume?
It assumes a standard 30-year fixed-rate mortgage regardless of how many years you plan to stay. If you’d use a 15-year loan or an adjustable rate instead, your actual monthly payment and equity buildup would differ from the estimate shown.Why does the calculator assume 3% annual home appreciation and rent increases?
Roughly 3% per year is a commonly used long-run estimate for both home price growth and rent increases in the US. Your local market could run well above or below that, so treat the result as illustrative rather than a forecast.What should I enter for “home costs per year”?
Enter property tax, homeowners insurance, and expected maintenance or upkeep as a combined percentage of the home’s price per year. A typical range is around 1% to 3%, depending on your location and how old the home is.Does the result include closing costs or costs of selling the home?
No. The calculator focuses on the down payment, mortgage payments, and ongoing home costs versus rent. Closing costs on the purchase and selling costs like agent commissions aren’t included, and would push the net cost of buying higher.How does home equity affect the net cost to buy?
Equity — your home’s estimated value minus what you still owe on the mortgage — is subtracted from your total buying outflow, since you’d theoretically recover it by selling. That’s why buying often looks cheaper the longer you stay.What if I plan to stay longer than 30 years?
The calculator caps mortgage payments and remaining balance calculations at 360 months (30 years), since that’s the loan term assumed. Home costs and rent, however, continue accruing for however many years you enter beyond that.Related Calculators
Before deciding to buy, the mortgage calculator can break down your exact monthly payment in more detail, and the home affordability calculator helps confirm what price range fits your income. Don’t forget upfront costs either — the closing cost calculator estimates the fees due at signing that this comparison doesn’t include.