Rent vs. Buy Calculator

Buying carries large one-off costs — roughly 3% of the price to buy and 6% to sell — and those have to be earned back through appreciation and equity before ownership comes out ahead. That makes time the decisive variable. The honest comparison also credits renting with something people forget: the down payment you didn't spend is money that can be invested instead.

With 20% down at 6.5%, principal and interest run $2,023 a month. Over seven years, buying costs about $161,600 net of the equity recovered at sale, while renting at $2,200 with 3% annual increases costs about $156,000 after crediting 6% growth on the $92,000 not tied up in a down payment. Renting wins by roughly $5,600 — close enough that small changes in assumptions flip the answer.

Push appreciation from 3% to 5% and buying wins comfortably. Raise the investment return to 8% and renting pulls ahead. Extend the stay from seven years to fifteen and buying wins almost regardless, because the fixed transaction costs spread over more years while rent compounds upward. Treat the output as a sensitivity test: change one input at a time and see how fragile the conclusion is.

Maintenance is the big one — roughly 1% of the home's value a year, lumpy and unavoidable, and it buys no equity. Property tax and insurance both tend to rise faster than general inflation. Add PMI if you put down less than 20%, HOA dues where they apply, and the closing costs on both ends. A mortgage payment equal to your rent is not the same monthly cost as your rent.

A fixed-rate mortgage caps your housing cost for thirty years while rent keeps climbing, which is real protection this model only partly captures. Against that, owning is illiquid and ties you to one place and one labour market; selling inside a few years is usually a loss. Renting buys flexibility, and if a job change or a move is plausible within five years, that option has genuine value no spreadsheet will show you.