Calculators / Rent vs Buy

Rent vs Buy Calculator

Buying isn't automatically "throwing money away on rent," and renting isn't automatically losing. It depends on the numbers. This compares your net worth either way: buying and building equity, vs renting and investing the down payment and any monthly savings. Everything runs in your browser.

The home

Home price ($) Down payment (%) Mortgage rate (%/yr) Amortization (years) Property tax (%/yr) Maintenance (%/yr) Home appreciation (%/yr) Closing + selling costs (%)

Renting + investing

Monthly rent ($) Rent increases (%/yr) Investment return (%/yr) Compare over (years)

The renter invests the down payment + closing costs up front, then invests the monthly difference whenever renting is cheaper (and the buyer invests it when buying is cheaper). Both grow at the investment return.

How this works

Two people with the same money: one buys, one rents and invests the difference. Each month we track both net worths.

Buyer: pays the mortgage, property tax, and maintenance; builds equity as they pay down principal and the home appreciates. Net worth = home value minus selling costs minus the remaining mortgage.

Renter: invests the down payment + closing costs up front, then invests the monthly cash-flow difference. Net worth = that portfolio.

The break-even year is when buying's net worth overtakes renting's. Before it, renting-and-investing is ahead; after it, buying is. Simplifications: constant rates, taxes as a % of current value, no rent-vs-own lifestyle differences, no tax deductions. Illustrative, not advice.

Illustration only: accuracy not guaranteed. A simplified model for education, not financial advice and not a recommendation to rent or buy. Which comes out ahead depends entirely on the assumptions you enter. See the disclaimer.

← All calculators