FINBIZTOOLS
Rent vs Buy Calculator
Compare the long-term financial position of renting versus buying. Enter your rent, the property price and mortgage terms, then optionally refine assumptions like appreciation, taxes and investment returns to see an estimated net position for each scenario over your chosen comparison period.
Private by design · Inputs and downloads stay in your browser
Changes the currency symbol and number format only. Amounts are not converted.
Every jurisdiction-sensitive cost (tax, insurance, maintenance, buying/selling costs) is an editable assumption you control, not a built-in rule. This is a full net-worth comparison, not just a cash-flow total; see the Methodology section below.
How to use the Rent vs Buy Calculator
- Enter your monthly rent, the property price, down payment, mortgage rate and mortgage term.
- Enter the comparison period — how many years you want to compare.
- Optionally open Advanced assumptions to refine rent growth, appreciation, taxes, insurance, maintenance, transaction costs and expected investment return.
- Select Calculate to see the estimated net position under each scenario.
Use the currency selector above the inputs to change the symbol. It changes the display only and does not convert amounts.
A net-worth comparison, not just a cost total
This calculator compares what your overall financial position could look like under each scenario, not just which one has lower monthly cash outflow. Buying's position accounts for home equity and appreciation as well as the costs paid; renting's position assumes the money that would have gone toward a down payment and buying costs is invested instead.
Neither scenario is labeled “best” or “recommended” — the numeric difference is shown so you can judge it against your own priorities and how sensitive it is to the assumptions you choose.
How the calculation works
Rent vs Buy methodology
Buying's net position = (property value − remaining mortgage balance − selling costs) − interest paid − tax − insurance − maintenance − HOA − buying costs
Renting's net position = future value of (down payment + buying costs) invested at your assumed return − total rent paid (with annual escalation)
- Only mortgage interest is subtracted for buying, not the full payment, because the principal portion is already reflected in the reduced remaining balance — subtracting both would double-count it.
- Property value = price × (1 + appreciation)^years. Rent escalates once a year by the rent-growth assumption.
Only the opportunity cost of the down payment and buying costs is modeled as an investment; month-to-month differences between rent and housing costs are not additionally invested. This keeps the methodology transparent rather than adding another layer of assumptions.
Rent vs Buy calculation example
Renting at 2,000 a month (3% annual increase) compared with buying a 400,000 property with an 80,000 down payment at 6% over 30 years, over a 10-year comparison period, with 3% appreciation, 4,000 annual tax, 1,200 annual insurance, 1% maintenance, 2% buying costs, 6% selling costs and a 5% assumed investment return:
| Monthly rent | 2,000 |
|---|---|
| Property price / down payment | 400,000 / 80,000 |
| Mortgage rate / term | 6% / 30 years |
| Comparison period | 10 years |
| Estimated total renting cost | 275,133.10 |
|---|---|
| Estimated owner equity | 269,772.23 |
| Estimated net ownership position | −40,503.48 |
| Estimated net renting position | −131,790.38 |
| Estimated difference between scenarios (buying minus renting) | 91,286.89 |
Both net positions are negative here because of transaction costs and the short 10-year hold, but buying is estimated to be about 91,287 ahead of renting under these particular assumptions. Amounts are shown without a currency symbol because the arithmetic is identical in any currency. The currency selector only changes the symbol and number format; it never converts amounts.
Assumptions and limitations
Assumptions
- Rent increases once a year by the rent-growth percentage; property value appreciates once a year by the appreciation percentage.
- Tax, insurance and HOA are constant amounts over the comparison period (not escalating); maintenance is a percentage of the original price each year.
- The down payment and buying costs are the only amounts assumed invested for the renting scenario; ongoing monthly savings from renting being cheaper are not additionally invested.
Limitations and why results can differ
- This does not predict future property prices, rents or investment returns — every rate is an assumption you control.
- Tax, insurance, maintenance, buying costs and selling costs vary enormously by country and region; the defaults shown are editable planning assumptions, not universal figures.
- A short comparison period tends to favor renting because buying's transaction costs are spread over fewer years; a longer period tends to favor buying as equity and appreciation compound. Try a few different periods.
Frequently asked questions
What assumptions affect the result most?
The appreciation rate, the investment return assumption, and the comparison period tend to matter the most. Try adjusting each one to see how sensitive the outcome is.
Does the calculator predict home prices?
No. Appreciation, rent growth and investment return are all assumptions you enter, not forecasts or market data.
Why are both net positions sometimes negative?
Buying and renting both involve real costs — interest, transaction costs, or rent — so over shorter periods both net positions can be negative even though one is estimated to be less negative than the other.
What if I put 100% down and have no mortgage?
Set the down payment equal to the property price. The loan amount and mortgage payment both become 0, and the comparison runs normally on the remaining costs.
Methodology
Inputs are validated: monthly rent, property price and down payment from 0 upward (down payment cannot exceed price), mortgage rate from 0% to 50%, mortgage term and comparison period each from 1 to 50 whole years, and optional rent growth, appreciation, tax, insurance, maintenance rate, HOA, buying costs, selling costs and investment return, each defaulting to 0.
Buying's net position is (property value − remaining mortgage balance − selling costs) minus interest paid, tax, insurance, maintenance, HOA and buying costs over the comparison period; only interest is subtracted, not the full payment, because principal already reduces the remaining balance used in the equity figure. Renting's net position is the future value of the down payment plus buying costs, invested at the assumed return, minus total rent paid with annual escalation. Both draw on the same shared mortgage engine for the mortgage side of the calculation. The break-even year, when present, is found by re-running this same calculation for each year up to the comparison period and reporting the first year the sign of the difference changes. The calculation runs in your browser and inputs are not sent to a server.
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Disclaimer
Results are estimates based on the assumptions you enter and do not guarantee future returns. This page is for information only and is not financial, investment or tax advice. Read the full Disclaimer.
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This tool is part of Loans and Mortgages.
A common order: check what you can afford, compare loan offers, then see how extra payments change total interest.