🏡 Rent vs Buy Calculator
📊 Comparison Results
Enter your details and click "Compare" to see the verdict.
📅 Detailed Breakdown
Enter your details and click "Compare" to see the detailed breakdown
🧮 Understanding Rent vs Buy
The decision to rent or buy depends on your time horizon, market conditions, and financial flexibility.
When Renting Might Be Better:
- Short-term stay (planning to move within 2-3 years)
- Uncertain job market or need for flexibility
- Limited savings for down payment and emergency fund
- High-price markets where rent is significantly cheaper
When Buying Might Be Better:
- Long-term stability (planning to stay 5+ years)
- Building equity through real estate
- Tax benefits (mortgage interest and property tax deductions)
- Rapidly increasing rent in your area
Use this calculator to analyze your specific situation, but remember that the best choice depends on both financial calculations and personal preferences.
🧭 How to Use This Calculator
- Select your preferred currency from the dropdown at the top of the calculator.
- Enter your monthly rent and expected annual rent increase percentage.
- Enter the home price you're considering, your down payment, and the mortgage rate and term you'd qualify for.
- Add estimated property tax and maintenance rates, plus your expected home appreciation rate.
- Enter the investment return rate you could earn if you invested your down payment and any cost difference instead of buying.
- Click Compare to see your total rent cost, total buy cost, final home equity, net buying cost, and opportunity cost — plus a clear verdict on which option comes out ahead.
- Use the Rent Schedule / Buy Breakdown tabs below your results to see the full year-by-year detail behind each scenario.
- Click Reset at any time to clear all fields and run a new comparison.
❓ Frequently Asked Questions
What does "opportunity cost" mean in this calculator?
Opportunity cost represents what your down payment and any extra costs of owning (compared to renting) could have earned if invested elsewhere instead, growing at your entered investment return rate. It's factored into the comparison so you're weighing the true cost of tying up that money in a home.
How is home equity calculated?
Home equity is your estimated home value in a given year minus your remaining mortgage balance at that point. As you pay down principal and your home potentially appreciates, your equity grows — this is the wealth-building side of buying that renting doesn't offer.
What is the 5% rule of thumb mentioned in the info section?
It's a quick rule for comparing renting and buying: the annual cost of owning a home is roughly 5% of its value (about 1% in property taxes, 1% in maintenance, and 3% in the opportunity cost of capital tied up in the home). If your annual rent is well below 5% of a comparable home's price, renting may be the more cost-effective choice.
Why might buying show as cheaper even with a higher monthly payment?
Buying builds equity over time as you pay down your mortgage and your home potentially appreciates in value. Even if your monthly housing cost is higher than rent, the equity you build can outweigh that difference, especially over a long time horizon — this calculator accounts for that in its final verdict.
How much does the number of years I plan to stay affect the result?
Significantly. Buying typically involves large upfront costs (like your down payment) that take time to offset through equity growth and avoided rent increases. The longer your time horizon, the more likely buying is to come out ahead — try adjusting your mortgage term or comparison period to see how the verdict changes.