Rent vs Buy Calculator
Compare the simplified total cost of renting versus buying a home over the years you plan to stay.
How it works
Buying cost ≈ mortgage interest + ownership costs; renting cost = rent compounded by the annual increase
This is a deliberately simple model. Renting adds up each year’s rent, rising by your increase rate. Buying treats your down payment and the principal you repay as equity you get back, so the true extra cost of owning is the mortgage interest plus ownership costs (property tax, insurance and upkeep, assumed at 1.5% of price a year). It ignores home appreciation, selling costs and the investment return a renter could earn on money not tied up in a house — so use it as a rough guide, not a verdict.
Worked example
Renting at $1,800/month rising 3% a year costs about $165,500 over 7 years. Buying a $350,000 home with $70,000 down at 6.5% costs roughly $122,000 in interest plus $36,750 in ownership costs — about $158,500 net, so buying edges out renting by around $7,000.
Frequently asked questions
Why does buying only count interest, not the whole payment?
The principal portion of each payment builds equity you recover when you sell, so it is not a true cost. Interest and ownership costs are money that does not come back.
What is the break-even for buying?
Often 5–7 years. Buying carries big up-front and selling costs, so short stays usually favor renting even when the monthly payment looks similar to rent.
Does this include home price growth?
No — it assumes a flat value to stay conservative. Appreciation helps buyers, but it is uncertain and offset by selling costs of roughly 6–9%.
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This is an educational estimate, not financial advice. Confirm figures with your lender, advisor or tax professional.