Rent vs Buy Calculator

This rent vs buy calculator gives a practical first-pass comparison between buying a home and renting an equivalent one. It keeps the assumptions visible so you can test interest rates, rent growth, appreciation, and your likely holding period.

Inputs

Home price

Down payment (%)

Mortgage rate (%)

Loan years

Monthly rent

Rent growth per year (%)

Home appreciation per year (%)

Investment return on down payment (%)

Holding years

Verdict

Enter your housing assumptions to compare.

Net cost of buying$0

Net cost of renting$0

Monthly mortgage$0

Crossover yearNone

How it works

Buying cost is down payment plus mortgage payments and a simple 1.5% annual owner-cost allowance, minus ending equity. Ending equity is the appreciated home value minus the remaining mortgage balance.

Renting cost is rent paid with annual rent growth, minus the investment gain you could earn by investing the down payment instead. This is a simplified comparison, not a full tax or closing-cost model.

Once you compare housing costs, include recurring household commitments in the same budget. For example, the Costco membership calculator tests whether your realistic warehouse savings recover the annual fee instead of assuming every membership pays for itself.

Methodology

Buying cost combines down payment, mortgage payments, a 1.5% annual owner-cost allowance, and ending equity. Renting cost combines rent with rent growth, then subtracts the modeled investment gain on the down payment.

Assumptions

Default home price 450,000, 20% down payment, 6.5% mortgage, 30-year loan, 2,500 rent, 3% rent growth, 3% appreciation, 5% investment return, and 7 holding years are examples.
The 1.5% owner-cost allowance is a simplified proxy for ownership expenses.
The crossover year is the first year when modeled buying cost is lower than modeled renting cost.

Example calculation

With a 450,000 home and 20% down payment, the model estimates mortgage payments, owner costs, ending equity, and compares that against rent plus potential investment gains.

Limitations

Taxes, closing costs, HOA dues, insurance, repairs, selling costs, rent concessions, and tax deductions are not modeled separately.
Home appreciation and investment returns are uncertain and can dominate the result.

Last updated: July 7, 2026

Estimate disclaimer: This tool provides estimates only. It is not financial advice. Results depend on the numbers you enter and the simplified assumptions listed here.

This tool runs entirely in your browser. Your input never leaves your device.

Frequently asked questions

What does this rent vs buy calculator include?

It includes down payment, mortgage payments, a simple 1.5% annual owner-cost assumption, home appreciation, rent growth, and investment gains on the down payment.

What does net cost of buying mean?

It is cash paid into the home plus owner costs, minus the equity you would have if you sold at the end of the holding period.

Why invest the down payment in the renting case?

Renting keeps the down payment liquid. The calculator subtracts the investment gain on that money from total rent cost.

Does this include taxes, insurance, HOA, or closing costs?

Those are not separate inputs. The 1.5% annual owner-cost assumption is a simplified proxy, so adjust your interpretation if your local costs are much higher or lower.

What is the crossover year?

It is the first year when the modeled net cost of buying becomes lower than renting. If it is beyond your holding period, renting wins on this model.