Rent vs Buy Calculator

How renting and buying are compared

The fairest way to compare renting and buying is to give both paths the same money and see who ends up wealthier. In this model the buyer puts down the down payment plus closing costs and then pays the mortgage, property tax, insurance, maintenance and any HOA fees. The renter keeps that upfront cash and invests it, then pays rent. Whenever one path costs less each month than the other, the difference is invested at your chosen return. At the end of the horizon, each side's net worth is added up and compared.

The formulas

The monthly mortgage payment is P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the loan, r the monthly rate and n the number of payments. The home value grows as price × (1 + appreciation)^years. Buyer net worth is home value × (1 − selling costs) − loan balance + investments. Renter net worth is the investment portfolio. Rent rises once a year by your rent-increase rate, while property tax and maintenance follow the home's value. The break-even point is the first month after which the buyer's net worth stays at or above the renter's; if that never happens within 50 years, the tool says so.

Reading the result

Buying usually starts behind because of closing and selling costs, and pulls ahead only if appreciation, rent growth and equity build-up outweigh the cost of owning. That is why the break-even time matters more than a single number: if you may move before it, renting often wins. Try changing the appreciation, investment return and rent growth — they are the most sensitive assumptions. The model ignores tax deductions, mortgage insurance, rate changes and the personal value of owning or the flexibility of renting. It is an educational estimate, not financial advice.