Rent vs Buy Calculator

It adds up the full cost of each path over the years you plan to stay. Buying counts your down payment, closing costs, mortgage payments, property tax, insurance, maintenance, and HOA fees, then subtracts the net proceeds when you sell (the home's future value minus selling costs and the remaining loan balance). Renting counts total rent and renter's insurance, then subtracts the investment gains a renter could earn on the money not tied up in a down payment. The path with the lower net cost wins.

Buying has large one-time costs — closing costs to purchase and agent and transfer fees to sell — that are spread across however long you own. Stay only a year or two and those costs dominate, so renting usually wins. Stay long enough and equity plus appreciation outweigh them. The number of years you enter is the break-even horizon, and it's often the single most important input.

It uses principal and interest only for the mortgage, so it does not model PMI on low down payments. It also ignores income taxes — both the mortgage-interest deduction a buyer might claim and the tax a renter would owe on investment gains — and it holds property tax and maintenance at a percentage of the original price. Treat the output as a directional estimate, not a precise forecast.

Nobody knows future returns, so use conservative, defensible assumptions and test a range. Long-run home appreciation has historically tracked roughly inflation in many markets, and broad stock-market returns are often modeled around 5–7% before inflation. Run an optimistic case and a pessimistic case; if buying wins in both, the decision is robust. If the answer flips, it hinges on guesses about the future.