Rent vs Buy: Which Costs You Less Over Time?
See your personalized results based on your real numbers — not national averages.
What This Calculator Does
Our Rent vs Buy Calculator helps you evaluate the true long-term financial impact of renting versus owning a home. Instead of relying on generic averages, you enter your own numbers — home price, rent, interest rate, taxes, insurance, expected appreciation, maintenance, and investment return assumptions — and receive a personalized comparison.
The calculator models mortgage amortization, property appreciation, opportunity cost of your down payment, and investment growth to determine which option builds more wealth over your chosen time horizon.
How Rent vs Buy Works Financially
Buying a home involves principal payments, interest, property taxes, insurance, maintenance costs, and potential appreciation. Renting involves monthly payments with no equity, but also frees up capital that could be invested elsewhere. The break-even point depends on how long you plan to stay, the expected rate of home appreciation, investment returns, transaction costs, and financing terms. There is no universal answer — only what works best for your financial situation.
Why Personalized Numbers Matter
National averages can mislead. A 1% difference in interest rate, appreciation rate, or investment return can dramatically change long-term outcomes. That’s why this calculator is designed around your specific assumptions.
Compare Rent vs Buy (Free)
✔ Free to use ✔ No sign-up required ✔ Your data is never stored
How the Calculator Works
Our free rent vs buy calculator helps you compare the true long-term cost of renting versus owning a home. Adjust home price, rent, interest rate, taxes, maintenance costs, and investment returns to determine which option builds more wealth over time.
Example Scenario: 5-Year vs 10-Year Comparison
To illustrate how the results can change over time, consider a $400,000 home purchased with a 20% down payment and a 7% fixed mortgage. Assume the home appreciates at 3% annually and that any money not used for a down payment is invested at an average 8% annual return.
Over a 5-year period, renting may appear competitive because closing costs, interest-heavy early mortgage payments, and transaction fees reduce short-term equity gains. While the home may appreciate, much of the early mortgage payment goes toward interest rather than principal, limiting net wealth growth in the early years.
However, over a 10-year horizon, the picture often changes. Appreciation compounds, more of each mortgage payment goes toward principal, and equity builds steadily. At the same time, investment returns for renters also compound — but the balance between housing appreciation and investment growth determines which strategy builds more wealth.
This is why time horizon matters. Short-term stays may favor renting, while longer-term ownership can shift the financial advantage toward buying. The only way to know which outcome applies to you is to compare the full long-term impact using your exact numbers.
FAQ
Are these calculators free?: Yes
Do you store my data? : No, calculations run securely and are not saved
Are the results accurate? : Standard formulas are used; actual loan terms may vary
Important to know
Disclaimer: These mortgage calculators provide estimates for informational and educational purposes only. Results are based on standard mortgage formulas and may not reflect actual loan terms, fees, taxes, insurance, or lender-specific conditions. This tool does not provide financial, lending, or legal advice.