Rent vs Buy Calculator

Should you rent or buy? This rent vs buy calculator adds up both sides over the years you stay — rent paid, mortgage payments, taxes, insurance and closing costs, minus the equity you build — and shows which one costs less.

Renting

What renting costs over the years you stay.

Monthly rent ($) Your monthly rent now, in dollars ($). Rent increase per year (%) How much rent rises each year, in percent (%). 3% is an example.

Buying

The home and the loan.

Home price ($) The price of the home, in dollars ($). Down payment ($) What you pay up front, in dollars ($). Interest rate (%) Annual interest rate, in percent (%) — an example rate, not a live market rate. Loan term The term of the loan. Years you will stay How many years you expect to stay in the home.

Other costs and growth

Taxes, insurance and how the home value changes.

Property taxes per year ($) Property taxes per year, in dollars ($). Homeowners insurance per year ($) Homeowners insurance per year, in dollars ($). HOA dues per month ($) HOA dues per month, in dollars ($). Put 0 if there are none. Home value growth per year (%) How much the home value rises each year, in percent (%). 3% is an example. Closing costs (% of price) One-off buying costs as a percent (%) of the price. 2% is an example.

How to use this calculator

Enter your rent now and how much it rises each year.
Enter the home price, down payment, rate and term.
Enter how many years you will stay, plus taxes, insurance and closing costs.
The calculator shows the total cost of renting, the net cost of buying, and which is cheaper.

Formula and method

Renting cost is the rent each month, rising by the rate you enter each year. Buying cost is the down payment plus closing costs plus every monthly payment (principal and interest, taxes, insurance, HOA and PMI while it applies) over the years you stay — minus the equity you hold at the end, which is the home value (grown by the rate you enter) minus the loan balance left. That net cost is what you compare with the rent. The result turns on how long you stay and how much the home value grows — both are guesses, so try a low growth rate too.

Worked example

Rent $1,800 a month rising 3% a year, against a $400,000 home with $80,000 down, a 6.5% example rate over 30 years, $4,800 a year of taxes, $1,800 a year of insurance and 2% closing costs, staying 5 years: total rent paid is $114,677.33. Buying costs $242,357.20 in cash out, but the home is worth $463,709.63 at the end with a $299,555.13 balance left, so equity is $164,154.50 and the net cost of buying is $78,202.70 — buying is cheaper by $36,474.63 in this example.

Stay 10 years instead and the gap grows: rent totals $247,619.79, the net cost of buying is $130,431.45, and buying is cheaper by $117,188.34. The longer you stay, the more buying usually wins — as long as the home value holds up.

Frequently asked questions

Is it cheaper to rent or buy a house?

It depends on rent, the home price, the rate and how long you stay. In the worked example — $1,800 rent, a $400,000 home, 5 years — buying is cheaper by $36,474.63. With a short stay or flat home values, renting often wins. Put your own numbers in above.

How long do you need to stay for buying to pay off?

There is no fixed number. In the example, buying is already ahead after 5 years, and further ahead after 10 years. Try 2 or 3 years in the calculator above — a short stay usually leaves renting cheaper, because the closing costs and early interest have no time to pay off.

Does rent vs buy include home value growth?

Yes — the home value grows by the rate you enter (3% in the example), and that growth is part of your equity at the end. If you set growth to 0%, buying looks much worse. Try both, because no one knows what home values will do.

What costs does buying have that renting does not?

Closing costs, property taxes, homeowners insurance, maintenance and repairs, and the interest on the loan. Renting has one cost: rent. Buying builds equity, which is the other side of the comparison.

Should I buy a house if rent is $1,800 a month?

Compare it with the home you would buy. In the example, $1,800 rent against a $400,000 home works out cheaper to buy over 5 years — but only with the growth and rate in the example. Change the rent, price or years above and the answer can flip.

Sources and method. Standard amortization formula: monthly rate r = annual rate / 12, n = years × 12, payment M = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1). PMI usually ends when the loan balance reaches 80% of the home value (Consumer Financial Protection Bureau guidance). Affordability uses the 28/36 rule of thumb used by many lenders. Rates in examples are examples only, not live market rates. Results are estimates, not financial advice.

Estimate, not financial advice. This calculator uses the standard amortization formula and the numbers you type in. It is not a loan offer and not financial advice. A lender will check your credit, income and debts and quote its own rate and fees before you borrow.