Rent vs Buy Calculator
Which is cheaper over the years you plan to stay.
Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths
Your values
ⓘ Live results
- Cheaper option
- Buying
- Total cost of renting
- $173,040.00
- Net cost of owning
- $132,799.29
- Estimated home value at sale
- $491,949.55
- Equity at sale
- $202,617.56
Quick answer
To compare renting with buying, add up all the rent you would pay over your stay, then compare it with the unrecoverable costs of owning: mortgage interest, upkeep and selling costs, minus any rise in the home's value. With $2,000 rent against a $400,000 home bought with $80,000 down at 6.5% and 3% yearly appreciation, buying comes out about $40,000 cheaper over 7 years.
What the Rent vs Buy calculator does
This calculator weighs the money you would never get back as a renter against the money you would never get back as an owner, over the number of years you expect to stay. Your down payment and the loan principal you repay are not counted as costs, because they come back to you as equity when you sell.
The ownership side adds mortgage interest on a 30-year fixed loan, a blended 2% of the purchase price each year for property tax, insurance and maintenance, and 6% of the sale price for agent and closing costs when you sell. It then subtracts the home's price growth. The renting side is your rent over the stay with a 3% uplift.
The biggest driver is usually how long you stay: buying carries large one-off costs that need several years of appreciation and principal paydown to absorb. Before deciding, check what you can borrow with the house affordability calculator and the monthly payment with the mortgage payment calculator.
Worked examples
Staying seven years
You pay $2,000 a month in rent and could buy a $400,000 home with $80,000 down at 6.5%, expecting 3% a year appreciation.
Inputs
- Monthly rent2000 $
- Home price400000 $
- Down payment80000 $
- Mortgage rate6.5 %
- Years you will stay7 years
- Home appreciation per year3 %
Result
- Cheaper optionBuying
- Total cost of renting$173,040.00
- Net cost of owning$132,799.29
- Estimated home value at sale$491,949.55
- Equity at sale$202,617.56
Renting costs about $173,000 over seven years against roughly $133,000 for owning, so buying wins by around $40,000. The estimated $203,000 of equity at sale is money you get back, not a cost.
Moving after three years
The same home and rent, but you expect to relocate for work in three years.
Inputs
- Monthly rent2000 $
- Home price400000 $
- Down payment80000 $
- Mortgage rate6.5 %
- Years you will stay3 years
- Home appreciation per year3 %
Result
- Cheaper optionRenting
- Total cost of renting$74,160.00
- Net cost of owning$74,484.06
- Estimated home value at sale$437,090.80
- Equity at sale$128,555.63
The two options are almost level — about $74,160 to rent versus $74,484 to own — so renting edges ahead. A slightly lower appreciation rate or any purchase closing costs would tip this further towards renting.
High-priced city
A $750,000 condo with $150,000 down at 6.5%, compared with renting a similar place for $2,500 a month, over 10 years at 2% appreciation.
Inputs
- Monthly rent2500 $
- Home price750000 $
- Down payment150000 $
- Mortgage rate6.5 %
- Years you will stay10 years
- Home appreciation per year2 %
Result
- Cheaper optionRenting
- Total cost of renting$309,000.00
- Net cost of owning$404,354.67
- Estimated home value at sale$914,245.81
- Equity at sale$405,589.06
Renting is cheaper by about $95,000 over 10 years. When the price is 25 times a year's rent, interest and upkeep on the bigger loan outweigh the rent saved.
What drives the answer
Change one input at a time to see which matters most for your situation.
| Input | Pushes towards buying when… | Pushes towards renting when… |
|---|---|---|
| Years you stay | You stay longer (often 5+ years) | You may move within 2–4 years |
| Price-to-rent ratio | Home price is low relative to annual rent | Price is 20+ times a year's rent |
| Mortgage rate | Rates are low | Rates are high — more of each payment is interest |
| Appreciation | Local prices are rising steadily | Prices are flat or falling |
| Down payment | A larger deposit shrinks the interest bill | A small deposit means more interest and possibly PMI |
What this comparison leaves out
The model keeps the inputs to six numbers, so a few real costs are simplified or missing:
- Buying costs of roughly 2–5% of the price (lender fees, title, transfer taxes) are not included; add them mentally to the cost of owning.
- Opportunity cost: the down payment could have been invested instead. At a 5% return, $80,000 would earn tens of thousands over seven years, which narrows buying's lead.
- Rent increases are added as a flat 3% on the total rather than compounding each year, which understates renting costs over long stays.
- Taxes: the mortgage interest deduction only helps if you itemize, and many owners take the standard deduction instead.
- Upkeep is a blended 2% of the purchase price per year. High property-tax states or older homes can cost more.
- PMI is not included; with less than 20% down, budget for it on top.
Price-to-rent ratio as a quick check
Divide the home price by a year's rent for a comparable place. A common rule of thumb is that a ratio below about 15 tends to favor buying, and above about 20 tends to favor renting, with the middle depending on how long you stay and how fast prices rise.
In the examples above, $400,000 ÷ $24,000 = 16.7 and buying won over seven years, while $750,000 ÷ $30,000 = 25 and renting won over ten. If you are leaning towards renting, the rent affordability calculator helps set a sensible rent budget.
How to use the Rent vs Buy Calculator
- 1Enter the rent for a home comparable to the one you would buy — same area, size and condition.
- 2Enter the purchase price, your down payment and the mortgage rate you have been quoted.
- 3Enter how many years you realistically expect to stay before selling.
- 4Set an appreciation rate based on long-run local prices, then try a lower one to see how sensitive the answer is.
Frequently asked questions
How many years do you need to stay for buying to beat renting?
Often around five years, but it varies with the price-to-rent ratio, rates and appreciation. With the default inputs here, buying is roughly break-even at three years and clearly ahead by seven.
Is rent really wasted money?
No. Rent buys housing, just as mortgage interest, property tax, insurance and maintenance do for an owner. The fair comparison is rent against those unrecoverable ownership costs, which is what this calculator does.
Does this include my down payment as a cost?
No. The down payment and principal you repay become equity that you recover when you sell, so they are not counted as costs. Only interest, upkeep, selling costs and price change are.
What if home prices fall?
Enter a negative appreciation rate, such as -2. Falling prices add to the cost of owning and make renting more attractive, especially over short stays.
Should I include HOA fees?
The calculator's 2% yearly upkeep allowance does not cover HOA dues explicitly. If you pay them, raising the home price slightly or comparing against a lower rent is a rough way to reflect them.
References
- Buying a House – tools and resources for homebuyers — Consumer Financial Protection Bureau
- Publication 530, Tax Information for Homeowners — Internal Revenue Service
About this calculator
- Built and reviewed by the Calculation Machine team · How we build and test calculators
- Last reviewed: October 24, 2026
- Report an error