Rent Versus Buy Calculator

Deciding whether to rent or buy is one of the biggest financial choices most people face. This calculator helps you compare the long-term financial impact of each option using your specific inputs.

As you adjust the numbers, you’ll see how home value growth, rent increases, taxes, and investment returns change the outcome. Advanced Options let you fine-tune details like your tax bracket, filing status, and appreciation rates.

This tool focuses on the financial side of the decision. Personal factors like flexibility, stability, and lifestyle preferences matter too.

Like any tool that projects into the future, a few significant assumptions are necessary.

How it Works

To make the comparison fair, we assume you have the same total amount of money available whether you rent or buy.

  • Your renter's "starting investment" is the money you would have spent on a down payment and closing costs when buying a home.
  • If renting is cheaper, you invest the difference.
  • If owning is cheaper, you invest that difference instead.
  • At the end of your timeframe, we compare total assets.

How We Compare Scenarios

  • Mortgage-related tax refunds are invested - If you itemize deductions as a homeowner, the annual tax savings the result from mortgage interest are added to your investment balance.
  • Equal money in, equal money out - We assume you have the same total money available whether you rent or buy. When one option costs less each month, we assume you invest the difference.

What Changes Over Time

  • Rent increases annually at the rate you select.
  • Home value grows annually at your chosen appreciation rate.
  • Property taxes and maintenance adjust each year based on the updated home value.
  • HOA dues and insurance increase 3 percent annually.
  • Mortgage payment stays fixed for the full loan term.

Tax Benefit Calculation

  • We compare your itemizable deductions (mortgage interest + property taxes) to the standard deduction for your filing status.
  • You only receive a tax benefit if itemizing exceeds the standard deduction. If you have other deductions, your savings may be greater.
  • The property tax deduction is subject to SALT limits, which currently allow a higher temporary cap and revert to $10,000 in 2030.

Other Assumptions

  • PMI Removal - Private mortgage insurance is removed at 20% equity.
  • Investment Returns - Applied monthly at a constant rate.
  • Closing Costs - Buyer pays at purchase; seller pays at sale.

What's NOT Included

  • Home renovations, major improvements, or utilities.
  • Market timing or economic downturns.
  • Capital gains tax on investments or home sale (most primary residences qualify for exclusion).
Please Note
All projections assume consistent rates over time. In reality, home values, rents, and investment returns fluctuate. Use this calculator to understand the general dynamics of renting vs. buying - not as a guarantee of future results.
Years
Many of the benefits of buying accumulate over time. Your choice here will be our comparison period.

Renting

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%

Buying

$
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%
Years

Assets if Renting

$0

Assets if Buying

$0

Advanced Options

Ownership Costs

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$
%
$
* Represented as an annual percentage of home value. At 1%, the annual maintenance estimate of a $500,000 home would be $5,000.

Buying Transaction Costs

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%

Market Assumptions

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%

Tax Considerations

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Understanding Your Results

We compare both scenarios, assuming you spend the same amount either way. When one option costs less each month, you invest the savings. Otherwise, the comparison wouldn't be accurate.

Buying Scenario

Building home equity over time may offset ownership costs and even offer tax benefits. Numbers in parentheses represent net costs, while the others represent gains.

Down Payment −$0
Buyer Closing Costs −$0
Mortgage Interest −$0
Property Taxes −$0
Insurance −$0
Maintenance −$0
Home Value at Sale $0
Remaining Mortgage −$0
Seller Closing Costs −$0
Net Home Equity $0
Assets if Buying $0

Renting Scenario

Home equity isn't the only way to build wealth. The Starting Investment value represents the money you would have spent when first buying a home (down payment and closing costs) based on your inputs. Use Advanced Options above to modify your return.

Starting Investment $0
Total Rent Paid −$0
Investment Balance $0
Assets if Renting $0

The "Invest the Difference" Concept

Each month, the rent-versus-buy option with the lower housing cost invests the difference (you can change the investment and home equity growth settings under Advanced Options). This approach ensures a fair comparison since each scenario uses a similar amount of money.

Owner's Investments

Starting investment: $0

Year
Monthly Rent
Monthly Owner Cost
Monthly Investment
Tax Refund
Year-End Balance
Home Equity
Highlighted rows show years when one option cost less than the other. The savings is invested.

Renter's Investments

Starting investment: $0 (down payment plus closing costs)

Year
Monthly Rent
Monthly Owner Cost
Monthly Investment
Year-End Balance

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