Rent vs Buy Calculator
Compare the true cost of renting against buying over the years you plan to stay — including equity, taxes, and appreciation.
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Cheaper option over 7 years
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Net buying cost = out-of-pocket minus principal paid down and 3%/yr appreciation.
How it works
Monthly ownership cost adds up principal & interest, property tax, insurance, HOA, and maintenance:
Over your stay, buying costs the down payment plus all monthly ownership costs — but you get two things back: the principal you paid down (equity) and appreciation, assumed here at 3% per year:
Renting is simply rent × months. Whichever net cost is lower wins. Rent is held flat in this model, which is conservative — rising rents would favor buying.
Frequently asked questions
Is renting really throwing money away?
Not necessarily. Early mortgage payments are mostly interest, and owners also pay property tax, insurance, maintenance, and HOA fees. Renting can be cheaper over short stays, while buying usually wins the longer you stay.
How many years until buying beats renting?
It depends on prices, rents, rates, and appreciation, but a common rule of thumb is 5 to 7 years. Use the calculator above with your own numbers and years-planning-to-stay to find your personal crossover point.
What hidden costs of owning does this include?
Property tax, homeowner's insurance, HOA dues, and maintenance as a percentage of the home's value. It also credits you for the principal you pay down and for assumed home-price appreciation.
Does this account for rent increases?
No — it uses your current monthly rent held flat, which is conservative. If rents rise over time, buying looks relatively better. You can approximate rising rents by entering a slightly higher monthly rent.