Rent vs Mortgage Gap Calculator
Compare your monthly rent to the true monthly cost of owning — principal, interest, taxes, insurance and HOA — and see the gap between them.
How it works
P&I = L·r·(1+r)^n ÷ ((1+r)^n − 1), r = rate ÷ 1200, n = years × 12 · Monthly tax = price × tax% ÷ 12 · Cost to own = P&I + tax + insurance + HOA · Gap = own − rent
Renters often compare rent only to a mortgage principal-and-interest quote, which understates ownership. The honest comparison adds property tax, homeowners insurance and any HOA dues — the carrying costs a landlord already bakes into your rent. This calculator surfaces that full monthly gap so you can weigh it against the equity you build and the tax and appreciation benefits ownership can bring.
Worked example
A $320,000 home with 20% down leaves a $256,000 loan; at 6.5% over 30 years that is about $1,618 in principal and interest. Add $293 property tax and $120 insurance and owning costs roughly $2,031 a month — about $231 more than $1,800 rent, or near $2,772 a year before any tax benefits or equity.
Frequently asked questions
Does a positive gap mean renting is better?
Not by itself. A higher monthly cost to own is partly offset by the principal you repay (forced savings), potential appreciation and mortgage-interest and property-tax deductions. The gap is the cash-flow difference, not the full financial picture.
Why add taxes and insurance?
A landlord pays property tax, insurance and maintenance and recovers them in your rent, so a fair comparison must include an owner's versions of those costs. Leaving them out makes owning look cheaper than it is.
What about maintenance?
This calculator covers the fixed monthly outlays. Budget an extra 1% of the home price per year for maintenance and repairs when comparing the true cost of owning.
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Educational estimate, not financial advice.