Rent vs Own 5-Year Cost Calculator

How it works

Rent 5-yr = Σ 12 × rent × (1 + g)ʸ · Own net = down + payments + carrying − equity · Equity = price × (1 + appr)⁵ − loan balance

Renting is pure expense, but owning mixes expense with equity. This model totals five years of rising rent on one side, and on the other the down payment, mortgage payments and carrying costs of owning, then subtracts the equity you would hold — appreciation plus principal paid down. The gap is the honest comparison. It deliberately ignores selling costs and the opportunity cost of your down payment, so treat a close result as a tie.

Worked example

Renting at $2,000/mo growing 3% a year totals about $127,400 over five years. Buying a $400,000 home with 20% down at 6.5% costs roughly $121,400 in payments, $50,000 in upkeep and the $80,000 down — but 3% appreciation and paydown leave about $164,000 in equity, so owning nets about $87,200. Owning wins by roughly $40,000 here.

Frequently asked questions