Rent vs Buy Calculator
Compare the total cost of renting and buying over time
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Compares the total cost of renting and of buying a home year by year, using your own figures. It shows which option costs less over the years you plan to stay and the year in which buying becomes cheaper.
How to use
- Under "Buying", enter the "Home price", "Down payment", "Mortgage rate", "Loan term" and the buying and selling costs.
- Under "Owning costs", enter the property tax rate, insurance, maintenance and HOA dues.
- Under "Renting", enter the "Monthly rent" and the yearly "Rent increase".
- Set the "Investment return" and "Years you plan to stay"; the result, the chart and the "Year by year" table update at once.
- Press "Save as CSV" to keep the yearly table.
How it works
- Net cost of buying: the down payment, closing costs and every mortgage, tax, insurance, maintenance and HOA payment, minus the equity you would keep if you sold at the end of that year.
- Net cost of renting: rent paid minus investment gains. The renter keeps the down payment and closing costs invested, and each month the cheaper side invests the difference.
- The mortgage has a fixed rate. Taxes (mortgage interest deduction, capital gains, tax on investment returns) and PMI are not included.
- Every figure follows from the assumptions you enter. It is a comparison, not a forecast of prices, rents or returns.
Questions and answers
- Is it better to rent or buy?
- It depends on the assumptions. The page shows the cheaper option under your figures; change "Home price growth", "Investment return" or "Years you plan to stay" to see how the answer changes.
- What is the break-even year?
- It is the first year in which the cumulative net cost of buying is equal to or lower than that of renting. If that does not happen within 40 years, the page says so.
- Why does buying cost more in the first years?
- Closing costs are paid at the start and selling costs are subtracted when you sell. Early mortgage payments are also mostly interest, so equity builds slowly at first.
- Does it include the mortgage interest tax deduction?
- No. Tax effects are not modeled on either side.