Rent Vs. Buy Calculator

What Is the Rent Vs. Buy Calculator?

The Rent Vs. Buy Calculator models the household balance-sheet effect of renting and buying. Buying includes the down payment, closing and selling costs, amortization, property tax, insurance, maintenance and appreciation. Renting includes rent growth and the potential investment return on available cash. Results include low, base and high appreciation scenarios plus an estimated break-even horizon.

How It Works

Enter the home, mortgage and transaction assumptions, then add current rent, annual rent growth and an investment return for the renter's available cash. Choose a realistic time horizon and review cumulative housing cost and ending net position for both paths. Stress-test appreciation, maintenance, selling costs and the expected move date because those assumptions often drive the answer.

When to Use It

Use it before buying a primary residence, comparing relocation options, or deciding whether a short expected stay justifies the up-front and selling costs of ownership.

Frequently Asked Questions

Why can buying lose over a short horizon?

Closing costs, early mortgage interest and eventual selling costs are concentrated around the transaction. They have less time to be offset by principal paydown or appreciation.

Does the calculator include nonfinancial benefits?

No. Stability, control over the property, flexibility, maintenance responsibility and personal preferences still matter and should be evaluated separately.

What investment return should renters use?

Use a return appropriate to the actual portfolio, taxes, fees, risk and horizon. Do not assume every dollar of theoretical savings will be invested unless that behavior is realistic.

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