🏠 Rent vs Buy Calculator

Compare the net cost of buying a home versus renting over a chosen time horizon — factoring in the mortgage, property tax, maintenance, home appreciation, and what your down payment could have earned invested instead.

Home Price ($)

Down Payment (%)

Mortgage Rate (%)

Mortgage Term (years)

Property Tax + Insurance (%/yr of price)

Maintenance (%/yr of price)

Home Appreciation (%/yr)

Comparable Monthly Rent ($)

Annual Rent Increase (%)

Investment Return If Not Buying (%/yr)

Years to Compare

Two net costs, compared

Each side is reduced to one number - money out, less what you have left at the end:

net cost of buying  = down payment + mortgage paid + tax and maintenance
                      - (home value at end - mortgage balance)
net cost of renting = total rent paid
                      - growth on the down payment if invested instead

On the defaults - $400,000 home, 20% down, 6.5% over 30 years, 2.5% a year for tax and upkeep, 3% appreciation against $1,800 rent rising 3%, over 7 years - buying nets out at $117,282 and renting at $125,219. Buying wins by $7,936, which on a $400,000 decision is close to a tie.

The answer turns on two inputs

Years. At 3 years renting is ahead by $2,776; the lines cross around year 5, and by year 10 buying leads by $27,921. Buying costs are front-loaded, so time is what pays them back.
Appreciation. Cut it from 3% to 1% and buying loses by $55,159 instead of winning - a $63,000 swing from one field. Treat any result as a statement about the appreciation you assumed.

Selling costs are not modelled. About 6% for agent commission and closing fees would take roughly $29,500 off the ending home value, reversing the verdict on its own. The model also invests only the down payment, not the renter's monthly saving.

Frequently asked questions

How many years until buying beats renting?

With these defaults, about five. It is driven entirely by your own numbers, though: high rent or fast appreciation shortens it, and a wide gap between mortgage cost and rent stretches it past ten years.

Why is the down payment counted twice?

It is not. On the buying side it is cash out that comes back as equity at the end. On the renting side it is not spent at all, so only the investment growth it earns - $40,290 over seven years at 6% - is credited against rent.

Does this include the mortgage interest deduction?

No. Since the 2017 standard deduction increase most US filers no longer itemise, so for them the deduction is worth nothing. If you do itemise, lower the mortgage rate slightly to approximate the benefit.