Rent vs Buy Calculator
Compare the true cost of renting vs buying a home with mortgage amortization, appreciation, taxes, maintenance, and investment opportunity cost. Free online tool.
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What is Rent vs Buy Calculator?
A rent vs buy calculator compares the total cost of renting a home against buying one over the period you plan to live there. The buy side includes the down payment, closing costs, monthly mortgage payments, property taxes, and maintenance, offset by home appreciation and the sale proceeds when you eventually sell. The rent side includes rent payments that grow over time, offset by the investment growth on the cash you did not spend upfront. The result is a net-cost comparison plus the break-even year - the point at which buying becomes cheaper than renting. This free tool runs the entire simulation month by month in your browser, so nothing is uploaded and every assumption is yours to adjust.
Key Benefits
- Sees both sides fairly - models the renter investment opportunity cost that simple calculators ignore
- Full mortgage amortization instead of a rough monthly estimate, with remaining balance at sale
- Every major ownership cost included: closing costs, property tax, maintenance, and selling fees
- Break-even year matches the math to how long you actually plan to stay
- Year-by-year table shows exactly how the verdict shifts as rent grows and equity builds
Common Use Cases
- •Deciding whether to keep renting or buy your first home in the next few years
- •Relocating for a fixed-term job and weighing a short-hold purchase against renting
- •Comparing a condo purchase against renting a similar unit in the same building or area
- •Testing how a higher interest rate or faster rent growth flips the rent-vs-buy verdict
- •Showing clients or family a transparent, assumption-driven breakdown of both options
How to Use the Rent vs Buy Calculator
- Enter the purchase scenario: Type the home price, down payment percentage, mortgage interest rate, and loan term. The calculator derives the amortized monthly payment automatically.
- Enter the rental scenario: Type the monthly rent for a comparable home, the expected annual rent growth, and the annual return you could earn by investing the money you are not spending upfront.
- Set ownership costs: Enter annual property tax and maintenance as a percentage of home value, plus closing costs when buying and selling costs when you eventually sell.
- Pick your holding period and read the verdict: Set how many years you plan to stay. The tool compares the net cost of both paths, shows the break-even year, and lists a year-by-year table so you can see exactly when buying starts to win.
Key Features
- Full month-by-month simulation of both renting and buying paths over up to 40 years
- Mortgage amortization with monthly principal and interest, remaining balance, and total interest
- Growing rent, home appreciation, and investment returns all modeled with compounding
- Closing costs, property tax, maintenance, and selling fees included in the buy-side ledger
- Year-by-year comparison table with a clear per-year buy-vs-rent verdict and break-even year
- Fully offline in the browser with a one-click copyable summary
Frequently Asked Questions
How does this rent vs buy calculator work?
It runs a month-by-month simulation of both paths. The buyer pays the down payment and closing costs upfront, then mortgage payments, property tax, and maintenance every month, and finally sells the home (paying selling costs) at the end of the holding period. The renter pays rent that grows each year and invests both the upfront cash and any monthly savings at your chosen investment return. The tool then compares the net cost of each path.
What is the break-even year?
The break-even year is the first year in which the net cost of buying falls below the net cost of renting. If you plan to move before that year, renting is typically cheaper under your assumptions; if you stay longer, buying tends to win as rent keeps rising while the mortgage payment stays fixed and equity builds.
Why does the calculator include an investment return for the renter?
Fairness. The money a buyer ties up in a down payment and closing costs could otherwise be invested, so the renter scenario compounds that cash at your chosen rate. Monthly savings (when rent is cheaper than the buyer payment) are invested too. Ignoring this opportunity cost is the most common mistake in simple rent-vs-buy comparisons.
What percentages should I use for taxes, maintenance, and selling costs?
Typical defaults are around 1-1.5% of home value per year for property tax and around 1% per year for maintenance, though both vary by country, age of the home, and local rates. Selling costs including agent commissions and transfer fees commonly total 4-8%. Adjust these to match your local market for a more accurate verdict.