The Calculator App
Rent vs. Buy
Compare renting and buying with opportunity cost and selling costs. This is not a forecast or a purchase recommendation.
Renting
After 10 years, the lower net cost is renting by $12,729.95. Renting stays cheaper for all 10 years.
How this rent vs buy comparison works
You enter a home purchase, financing, holding period, and a rental alternative. The buy path includes down payment, closing and selling costs, loan amortization, taxes, insurance, HOA, and maintenance. The rent path includes rent growth and renters insurance. Net worth at the horizon compares home equity after selling costs plus any buyer portfolio to the renter portfolio built from upfront cash and monthly savings when rent is cheaper.
Break-even and short stays
Upfront buying costs and selling costs weigh heavily in early years, so a short stay often favors renting in this model even when the monthly mortgage looks similar to rent. A longer horizon gives appreciation and principal paydown more time to offset those costs.
What is not included
This page does not look up local rents or home prices, predict future markets, or model tax deductions, rent control, or special assessments. It is not a recommendation to buy or rent.
Questions
- Is it cheaper to rent or buy?
- This page compares modeled net worth after the years you choose, not just monthly rent versus mortgage payment. Buying builds equity but ties up a down payment and closing costs. Renting keeps that cash invested at the return you enter. Which path looks higher depends on price, rate, rent, appreciation, and how long you stay. The verdict is a planning estimate, not advice.
- How long do I need to stay for buying to win?
- The crossover year is the first year buy net worth exceeds rent net worth in this model. If there is no crossover within your horizon, renting stays ahead on net worth for that stay. Break-even on net cost can differ because net worth includes home equity and the renter portfolio.
- Does this include PMI, HOA, and maintenance?
- Yes on the buy side when your inputs imply them: HOA and maintenance use the percentages and amounts you enter, and PMI appears in the first-year buy breakdown when the down payment is below 20%. Rent includes rent and renters insurance. Property tax and homeowners insurance are included as you enter them.
- Are tax deductions modeled?
- No. Mortgage interest and property tax deductions are not applied. Actual tax benefit depends on your filing status, other deductions, and limits that change over time.
- What is opportunity cost?
- Cash the buyer spends upfront could have stayed invested. When renting is cheaper in a given month, this model invests that difference at your investment return. When buying is cheaper, no extra portfolio contribution is added that month.