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About the rent vs buy calculator
Buying a home is not always better than renting. It depends on the price, the rent, the interest rate and, most of all, how long you will stay. This calculator compares both choices in a fair way.
Both sides start with the same money. The owner pays the down payment and the buying costs, then the mortgage, property tax, upkeep and insurance. The renter keeps the down payment and buying costs invested instead. Each month, whoever pays less invests the difference.
At the end, the owner has the home's value minus the loan left and the selling costs, plus any savings. The renter has the investments. The result says which side comes out ahead, by how much, and from which year buying starts to win.
Features
- A clear answer — see if Buying or Renting comes out ahead, and by how much
- Break-even year — see the year when buying starts to win
- How long you will stay — compare over 3 to 30 years
- Fair comparison — the renter invests the down payment and any monthly difference
- Totals — the mortgage payment per month, the total paid as an owner and the total rent paid
- Fine-tune in More options — loan term, property tax, upkeep, insurance, home growth, rent increase, return on savings, and buying and selling costs
- 47 currencies — pick your Currency; the choice is remembered and used by the other money tools too
- Private and saved — it all works in your browser, nothing is uploaded, and your numbers stay on this device for next time
How to use it
- Type the Home price and the Rent per month for a similar home
- Set the Down payment (in %) and the Interest rate per year
- Choose How long you will stay
- Open More options to change the Loan term, Property tax per year (% of the price), Upkeep per year (% of the price), Home insurance per year, Home value growth per year, Rent increase per year, Return on savings per year, Buying costs (% of the price) and Selling costs (% of the price)
Example with the starting numbers
A $400,000 home or $2,000 rent, 20% down, 6.5% for 30 years, stay 10 years. Property tax 1.1%, upkeep 1%, insurance $1,500 a year, home value +3% a year, rent +3% a year, savings return 6%, buying costs 3%, selling costs 6%:
| Result | Amount |
|---|---|
| Who comes out ahead after 10 years | Renting |
| Ahead by | $42,671 |
| When buying starts to win | – (not within 10 years) |
| Mortgage payment per month | $2,023 |
| Total paid as an owner | $355,328 |
| Total rent paid | $275,133 |
The owner pays more each month, and the renter invests that difference at 6%. With these numbers, renting stays ahead for the whole 10 years.
How long you stay changes the answer
Same home and rent as above:
| How long you will stay | Who comes out ahead | Ahead by |
|---|---|---|
| 3 years | Renting | $39,403 |
| 5 years | Renting | $41,123 |
| 7 years | Renting | $42,279 |
| 10 years | Renting | $42,671 |
| 15 years | Renting | $38,385 |
| 20 years | Renting | $24,997 |
| 30 years | Buying | $49,823 |
Over 30 years, buying starts to win in year 25. Buying and selling a home costs a lot, so a short stay almost always favors renting.
The rent and the home growth matter most
Staying 10 years, everything else as above:
| Rent per month | Who comes out ahead | Ahead by | Buying wins from |
|---|---|---|---|
| $1,500 | Renting | $134,490 | – |
| $2,000 | Renting | $42,671 | – |
| $2,500 | Buying | $49,147 | year 6 |
| $3,000 | Buying | $140,966 | year 3 |
| Home value growth per year | Who comes out ahead | Ahead by |
|---|---|---|
| 0% | Renting | $155,430 |
| 2% | Renting | $83,828 |
| 3% | Renting | $42,671 |
| 4% | Buying | $2,457 |
| 5% | Buying | $51,883 |
Nobody knows the future growth of home prices. Try a low, a middle and a high number to see how sure the answer is.
Frequently asked questions
Is it better to rent or buy a house?
It depends on your numbers. Buying usually wins when you stay a long time, when rent is high compared with the price, and when home values grow. Renting often wins for short stays and when the money you save can be invested.
What is the break-even year?
It is the first year when the owner's money (home value minus loan and selling costs, plus savings) is more than the renter's investments. The calculator shows it as when buying starts to win.
Why does the renter invest the down payment?
To make it fair. If you rent, the down payment and buying costs stay in your pocket. The Return on savings per year says how fast that money grows. Set it to 0 if you would not invest it.
What do buying and selling costs include?
Buying costs are things like loan fees, taxes on the sale and legal fees. Selling costs are mostly the agent's fee and closing fees. Both change a lot by country, so type your own percent.
Does it count the tax benefits of owning?
No. Tax rules are different in every country, so they are not included. If you get a tax break for mortgage interest, buying may look a little better than shown.
Is this financial advice?
No. It is a planning tool with simple yearly rates. Real home prices, rents and returns go up and down.
Good to know
- Works with any currency — choose it at the top
- Your numbers are saved only in this browser
- Nothing you type is sent anywhere
Related tools
- How Much House Can I Afford — the price that fits your income
- Mortgage Calculator — the full monthly payment
- Rent Affordability Calculator — how much rent fits your income
- Compound Interest Calculator — what invested savings grow to
- Refinance Calculator — for owners with a loan already
