Rent vs Buy Calculator
Not which monthly payment is smaller — which choice leaves you wealthier after the years you actually expect to stay, once selling costs, maintenance and the return on invested cash are all counted.
The address carries whatever you changed, so anyone opening it sees these numbers. Nothing is saved on our side.
Buying pulls ahead in
Year 8
Before then, selling costs and interest outweigh the equity built. From year 8 the buyer’s position is the larger one.
- $3,615
- including maintenance
- $3,000
- at today's rent
- $115,000
- down payment plus closing
- $689,851
- equity after selling costs
- $472,817
- the invested difference
- $217,034
- in favour of buying
The two positions over time
Wealth after selling costs, if you sold in that year — the only fair way to compare, because a mortgage payment partly buys equity and rent does not.
Years from now
| Year | Buying | Renting | Home value | Ahead |
|---|---|---|---|---|
| 1 | $88,363 | $129,484 | Renting | |
| 2 | $107,446 | $144,104 | Renting | |
| 3 | $127,282 | $158,848 | Renting | |
| 4 | $147,906 | $173,701 | Renting | |
| 5 | $169,356 | $188,644 | Renting | |
| 6 | $191,670 | $203,661 | Renting | |
| 7 | $214,891 | $218,730 | Renting | |
| 8 | $239,061 | $233,829 | Buying | |
| 9 | $264,226 | $248,934 | Buying | |
| 10 | $290,436 | $264,019 | Buying | |
| 11 | $318,549 | $279,860 | Buying | |
| 12 | $348,844 | $296,651 | Buying | |
| 13 | $381,470 | $314,450 | Buying | |
| 14 | $416,587 | $333,317 | Buying | |
| 15 | $454,362 | $353,316 | Buying | |
| 16 | $494,977 | $374,515 | Buying | |
| 17 | $538,622 | $396,986 | Buying | |
| 18 | $585,502 | $420,806 | Buying | |
| 19 | $635,835 | $446,054 | Buying | |
| 20 | $689,851 | $472,817 | Buying |
How this calculator works
Two wealth positions, tracked month by month, compared at the point you would sell.
home value × (1 − selling costs) − loan balance
(deposit + closing costs + monthly difference), compounded
Each side invests whatever the other choice would have cost it more that month, at the return you set. The break-even is the first year the buyer’s position exceeds the renter’s — and if it never does within your horizon, the calculator says so.
The three that decide it
- Appreciation. Everything the buyer gains beyond paying down the loan.
- Investment return. Everything the renter gains. Set it equal to appreciation and buying almost always wins; set it far higher and renting does.
- How long you stay. Transaction costs are paid once and dominate short holds.
All three are inputs, and none of them is knowable in advance. Treat the answer as a map of the trade, not a prediction.
Questions people ask
Because it is a meaningless comparison. Rent buys nothing; part of a mortgage payment buys equity. A mortgage that costs more each month can still leave you wealthier, and often does — but not always, which is the point of running it properly.
Closing costs and selling costs. Typically 3% to buy and 6% to sell, so a home has to appreciate around 9% before a sale breaks even on transaction costs alone — before any interest. That is the real reason the usual advice is not to buy if you might move within a few years.
Yes, and it appears often at current rates. Where rent is cheap relative to prices — a price-to-rent ratio much above about 16 — renting and investing the difference can stay ahead for decades. The calculator reports that outcome plainly rather than nudging you toward buying.
In this model, yes, every month, at the return you set. Most people do not. If that difference would be spent rather than invested, the renting column here is optimistic and buying is stronger in practice than the chart suggests. It is the single assumption most likely to differ from your life.
Deliberately excluded. Mortgage interest deduction only helps if you itemise, the capital gains exclusion on a primary home is large but conditional, and state treatment varies widely. Assuming a benefit you may not receive would be worse than leaving it out, so the figures here are before tax on both sides.
Everything that is not financial: the freedom to move, the freedom to renovate, the risk of a landlord selling, the burden of a boiler failing on a Sunday. Those are usually the reasons people actually decide, and no calculator should pretend to price them.
Related calculators
An estimate on assumptions you supply. Appreciation, rent growth and investment returns are not constant in reality, and no tax treatment is modelled on either side.