Rent vs. Buy Calculator
Compare the true financial cost of renting versus buying a home — including equity, appreciation, opportunity cost, and all the hidden expenses.
Down payment: $70,000 — monthly P&I: $1,770
Over 7 Years
$55,188
Estimated advantage of buying
Total Cost of Renting
$235,925
Net Cost of Buying
$180,737
Home Equity Built
$177,290
Cumulative Cost Comparison
Compares total renting cost (including opportunity cost of down payment) against net buying cost over time.
Scenario Details
Renting Costs
Buying Costs
Advanced Options
Estimated Net Advantage of Buying
$39,786
Break-even point: Year 6
Break-even
Year 6
Total Cost of Renting
$245,731
Net Cost of Buying
$205,945
Home Equity Built
$201,430
Cost Comparison Over Time
Shows cumulative rent cost vs. net buying cost (total payments minus equity built) over the analysis period.
Monthly Rent Costs (Year 1)
Monthly Buy Costs (Year 1)
Key Metrics After 7 Years
Upfront Costs
Rent
$4,000
Buy
$92,000
Total Out-of-Pocket
Rent
$189,999
Buy
$240,639
Monthly Payment (Year 1)
Rent
$2,025
Buy
$2,926
Home Equity Built
$201,430
Home Appreciation
$91,950
Est. Tax Savings (Buying)
$17,901
Understanding This Analysis
Opportunity Cost
When buying, a down payment is locked in the home. This calculator considers what that money could have earned if invested elsewhere. This is a significant factor often overlooked in simple rent vs. buy comparisons.
Hidden Costs of Homeownership
Beyond the mortgage, homeowners pay property taxes, insurance, maintenance (typically 1–2% of home value annually), HOA fees, and transaction costs when buying and selling. These can add 30–50% to housing costs.
Time Horizon Matters
Buying typically becomes more favorable the longer the time horizon. Transaction costs (closing costs and selling fees) need time to be offset by equity building and appreciation. Many analyses suggest staying at least 5–7 years if buying.
About This Analysis
This calculator provides estimates based on the inputs you supply. It assumes standard amortization and does not account for taxes, insurance, PMI, prepayment penalties, or the opportunity cost of funds. Results are for informational and educational purposes only and should not be considered financial advice. Consult a qualified professional before making financial decisions.
- ·Does not account for all potential tax implications or deductions.
- ·Home appreciation, rent increases, and investment returns are estimates and may vary.
- ·PMI is assumed to drop off once 20% equity is reached.
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Also Consider
Quick Reference
- Closing Cost BreakdownTypical fees and who pays what
- PMI Thresholds & RatesWhen PMI applies, typical rates, removal rules
- Conforming Loan Limits2025 limits by county (FHA, conventional, jumbo)
- Current Mortgage Rates30-year, 15-year, ARM averages by credit score
- Mortgage Tax DeductionsWhat's deductible, limits, phase-outs
- Property Tax Rates by StateAverage effective rates and exemptions
Insights
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