Rent vs Buy Calculator
Renting and buying are rarely a fair fight on monthly payment alone — buying front-loads a down payment and pours years of interest and upkeep into the home, while renting quietly rises every year and builds nothing. This calculator settles the comparison over the actual number of years you plan to stay. It nets the equity you build against everything you spend, so you can see which option truly costs less for your situation.
- Net cost of buying
- Cost of renting
- Net cost of buying
- $65,872.03
- Cost of renting
- $165,509.18
- Home equity built
- $177,290.37
- Difference
- $99,637.15
Over 7 years, buying is cheaper than renting by about 99,637. Buying builds 177,290 of equity that offsets your outlay, while rent is money you never get back.
How it works
On the buying side, the calculator adds up every dollar that leaves your pocket over the years you stay: the down payment, each mortgage payment, and maintenance running at a percentage of the home value per year. It then subtracts the equity you own at the end — the home's appreciated value minus whatever loan balance remains. That net figure is the real cost of buying, because equity is wealth you keep when you sell.
On the renting side, it sums each year's rent, growing the figure by your assumed annual increase. Renting has no equity offset — every payment is gone for good.
The length of your stay is the decisive variable. Buying carries heavy upfront costs (the down payment and the interest-heavy early years), so it usually loses on a short horizon and wins on a long one. Appreciation and rent inflation tilt the result further, which is why the calculator lets you set both.
Net cost of buying = down payment + (monthly payment × months stayed) + upkeep − equity, where equity = home value at end − remaining loan balance, home value = price × (1 + appreciation)^years, and upkeep = price × maintenance% × years. Cost of renting = Σ over each year y of (monthly rent × 12 × (1 + rent increase)^y). The cheaper option is the one with the lower total over the years you stay.
Worked example
Buy a 350,000 home with 70,000 down at 6.5% over 30 years, and stay 7 years. Your payment is about 1,770/month, so you pay roughly 148,662 in mortgage over those 7 years, plus 24,500 in upkeep (1%/yr). The home grows to about 430,456 and you still owe around 253,165, leaving 177,290 in equity. Net cost of buying = 70,000 + 148,662 + 24,500 − 177,290 ≈ 65,872. Renting at 1,800/month rising 3%/year costs about 165,509 over the same 7 years. Buying is cheaper by roughly 99,637.
Things to watch out for
Short stays flip the result fast: selling costs, the interest-heavy early years, and a small equity cushion mean buying often loses if you move within a few years. The model assumes you simply hold the home and ignores transaction costs (agent fees, closing costs, taxes on sale), so treat the buying advantage as optimistic. It also assumes rent and home values move at steady rates — real markets are lumpier. Adjust appreciation and rent-increase assumptions to stress-test the conclusion.
Frequently asked questions
Why does the number of years I stay matter so much?+
Buying loads its biggest costs upfront — the down payment and the interest-heavy first years — while equity accumulates slowly. The longer you stay, the more that equity and any appreciation outweigh those upfront costs, which is why buying usually wins over a long horizon and loses over a short one.
Does this include selling costs?+
No. It assumes you hold the home and values the equity at its appreciated worth. Real sales incur agent commissions, closing costs, and sometimes taxes — typically several percent of the price — so the true buying advantage is a little smaller than shown.
What if rents rise faster than I assumed?+
Faster rent growth makes renting more expensive and tilts the comparison toward buying. Set the annual rent-increase field to your local trend to see how sensitive the result is.
Is the equity I build guaranteed?+
No. Equity depends on the home appreciating and on you paying down the loan. If prices fall, your equity shrinks and buying can become the costlier choice. The appreciation field lets you model conservative or even negative scenarios.
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Disclaimer: This calculator is for educational and informational purposes only and provides estimates, not financial advice. Interest rates, taxes, fees, and local rules vary and change over time. Confirm figures with a qualified professional before making any financial decision.
Last reviewed: 2026-06-22