Rent vs Buy Calculator
Compare the true cost of buying and renting over the years you plan to stay: mortgage interest, ownership costs, buying and selling costs and the lost return on your down payment against rent that rises each year and the home's appreciation.
Last updated: October 2026
Buying vs Renting
-$13,898.40
This calculator gives an estimate for general information only. It is not financial, tax or investment advice. Check the figures with a qualified professional before making decisions, and follow the rules that apply where you live.
Formula below · 2 sources (nytimes.com, investopedia.com) · Updated Oct 2026
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About this calculator
The calculator compares what each choice really costs you over the years you stay, not just the cash you hand over. Mortgage principal is not counted as a cost, because it comes back to you as equity when you sell.
Cost of buying
Net cost of buying = closing costs + mortgage interest + property tax, insurance and upkeep + selling costs + the return you give up on the down payment and closing costs − the rise in the home's value. Interest comes from a 30-year fixed loan on the price minus the down payment. Ownership costs are a percentage of the home's value each year, so they grow as the home appreciates. The forgone return is what the down payment and closing costs would have earned if invested instead, compounded over your stay.
Cost of renting
Total rent paid, with the rent rising by the chosen percentage once a year.
Reading the result
The default result is cost of buying minus cost of renting. A positive number means renting comes out cheaper by that amount over your stay; a negative number means buying does. Short stays tend to favor renting, because buying and selling costs are spread over few years; long stays and faster price growth favor buying.
What is left out
Income-tax effects (the mortgage interest deduction and the tax-free gain on a main home up to the federal limits), PMI, HOA dues, and investing the monthly difference between rent and ownership costs are not modeled. Price growth, rent growth and investment returns are uncertain, so try a few values. This is an estimate for planning, not financial advice.
How to use
Enter the home price, down payment, mortgage rate, how long you will stay and the rent for a comparable home, then adjust the growth and cost assumptions if you have local figures. With the defaults ($400,000 home, $80,000 down, 6.5%, 7 years, $2,200 rent rising 3% a year, 3% price growth), buying costs about $188,400 net and renting about $202,300, so buying comes out about $13,900 cheaper. Shorten the stay to 3 years and renting wins by about $20,450.
Frequently asked questions
Why isn't the whole mortgage payment counted as a cost?
Part of each payment repays principal, which you get back as equity when you sell. Only the interest is a cost, together with taxes, insurance, upkeep, buying and selling costs and the return your down payment could have earned elsewhere.
How long do I need to stay for buying to make sense?
It depends on prices, rents and rates where you live. Buying and selling costs often add up to around a tenth of the home's price, so short stays usually favor renting. Use the years field to find the point where the result turns negative.
What return should I assume on the down payment?
Use what you would realistically earn on that money instead, after considering risk: a savings or bond yield for a cautious comparison, a long-run stock return for an aggressive one. A higher return makes renting look better.
What does the calculator leave out?
Income taxes, PMI, HOA dues, rent deposits and investing the monthly difference between renting and owning. It also assumes steady growth rates, while real prices and rents move unevenly.
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Sources & references
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