Rent vs Buy Calculator
Compare the total cost of renting versus buying a home over any time horizon. Use this when deciding whether to purchase a home or continue renting, factoring in mortgage payments, property taxes, and down payment opportunity cost.
Last updated: September 2026
Formula below · 2 sources (CFPB, Wikipedia) · Updated Sep 2026
Compare with similar
About this calculator
This calculator compares the money you cannot get back under each option over your chosen time horizon. Renting: total rent = monthlyRent × 12 × years. Buying: the mortgage is a 30-year fixed loan on (home price − down payment) with the standard payment M = P × r / (1 − (1 + r)^−360), where r is the monthly rate. Only the interest part of those payments, plus property tax, is a cost: the principal you repay and your down payment stay with you as home equity, which you get back when you sell (the model values the home at its purchase price, i.e. no appreciation). Interest paid over the horizon = payments made − principal repaid. Result = total rent − (mortgage interest + property tax). A positive result means renting costs more over the period (buying is cheaper); a negative result means renting is cheaper. The model leaves out maintenance (often 1–2% of the home value a year), homeowner's insurance, closing and selling costs, appreciation, and the investment return the down payment could earn if you rented — add those yourself, since they can easily swing the answer.
How to use
Suppose you're considering a $400,000 home with an $80,000 down payment, a 6.5% 30-year mortgage, $3,600 annual property tax, versus renting at $2,000/month over 10 years. Loan = $320,000; monthly payment M = 320,000 × 0.005417 / (1 − 1.005417^−360) ≈ $2,022.62. Over 120 payments you pay $242,714, of which $48,717 repays principal (the balance falls to $271,284) and $193,998 is interest. Unrecoverable buying cost = $193,998 + ($3,600 × 10) = $229,998. Total rent = $2,000 × 12 × 10 = $240,000. Difference = $240,000 − $229,998 = $10,002, so on these assumptions renting costs about $10,000 more than buying over 10 years — before maintenance, insurance, closing costs and the return on the $80,000 down payment, which together would likely tip it toward renting.
Frequently asked questions
What factors does the rent vs. buy calculator not account for?
The calculator focuses on direct cash outlays and does not model home price appreciation, which can substantially increase buying's long-term value. It also excludes the opportunity cost of investing your down payment in the stock market, mortgage interest tax deductions, HOA fees, maintenance costs (typically 1–2% of home value per year), and renter's versus homeowner's insurance differences. For a complete picture, you should factor these in separately or consult a financial advisor.
How does the time horizon affect whether renting or buying is cheaper?
Buying typically becomes more attractive over longer time horizons because the fixed costs (closing costs, down payment, early high-interest mortgage payments) are spread over more years. In the first few years, renting is often cheaper because buyers haven't built significant equity and closing costs haven't been recouped. Most financial studies suggest the break-even point between renting and buying is typically 5–7 years, though this varies heavily with local market conditions, mortgage rates, and rent levels.
What is a realistic down payment percentage to use in the rent vs. buy calculator?
The conventional standard is 20% of the home purchase price, which eliminates private mortgage insurance (PMI) and results in a lower monthly payment. However, many buyers use 3–10% down through FHA or conventional loan programs. Using a smaller down payment increases your loan principal and monthly payment, making buying less financially attractive in the short term. You should also consider whether the down payment cash could earn meaningful returns if invested instead, which is an implicit cost of home ownership not shown in this calculator.