Rent vs Buy Property Calculator – Compare the True Cost in 3 Easy Steps
Rent vs Buy Calculator
Use this rent vs buy property calculator to compare the net cost of buying a home versus renting over your desired time horizon.
Use this free rent vs buy property calculator to compare the real cost of owning a home with the cost of renting over the years you plan to stay. Enter the home price, down payment, mortgage rate, property costs, your rent and expected investment returns, and the tool shows which option leaves you better off and by how much.
Quick answer
The calculator compares the net cost of each choice. Net cost of buying = everything you pay (down payment, mortgage payments, tax and maintenance) minus the equity you build. Net cost of renting = total rent minus what your down payment would have earned if invested. For a $400,000 home with 20% down at 6.5%, versus $2,000 rent rising 3% a year, buying comes out about $41,330 ahead after 10 years.
Table of Contents
"Renting is throwing money away" is a popular saying, but it is not always true. Mortgage interest, property tax, maintenance and the lost return on a large down payment are costs too. Whether buying wins depends on prices, rates and, above all, how long you stay.
This rent vs buy property calculator puts both paths side by side with your own numbers. It runs in your browser and saves nothing.
How the Rent vs Buy Comparison Works
Buying Scenario
- Down payment paid up front.
- Monthly mortgage payment on a 30-year fixed loan.
- Annual property tax and maintenance as a percentage of the home price.
- Home value grows at 3% a year, and equity = home value − remaining loan balance.
Renting Scenario
- Monthly rent that rises by your chosen percentage each year.
- The down payment you did not spend is invested at your expected return rate.
- Investment gains reduce the net cost of renting.
Rent vs Buy Formulas
- Monthly mortgage payment = L × r ÷ (1 − (1 + r)−n), where L is the loan, r the monthly rate and n = 360 months
- Net cost of buying = down payment + mortgage payments + tax and maintenance − equity
- Net cost of renting = total rent paid − investment gains on the down payment
- Advantage = the difference between the two net costs
For a $320,000 loan at 6.5%, the monthly mortgage payment is about $2,022.62.
How to Use the Rent vs Buy Property Calculator
Step 1: Enter Your Buying and Renting Details
Set the time horizon, the number of years you expect to live there. Then fill in the home price, down payment percentage, mortgage rate and yearly property tax and maintenance. On the renting side, enter your current rent, the expected yearly rent increase and the return you could earn by investing the down payment.
Step 2: Compare the Net Cost of Each Option
Press Compare Scenarios. In this example, buying costs $422,714 in cash over 10 years but builds $266,283 of equity, for a net cost of $156,431. Renting costs $275,133, offset by $77,372 of investment gains, for a net cost of $197,761. Buying is ahead by $41,330.
Step 3: Test a Shorter Stay
Change the time horizon to see how the answer shifts. Over 4 years, buying is only $4,471 ahead, before agent fees and closing costs, which this calculator does not include. Those costs often reach 6% to 10% of the price, so for a short stay renting would usually win.
What Makes Buying or Renting Win?
| Factor | Favours buying | Favours renting |
|---|---|---|
| Time in the home | Long stay (7+ years) | Short stay or likely move |
| Mortgage rate | Low rates | High rates |
| Rent level | High rent compared with prices | Low rent compared with prices |
| Home price growth | Strong appreciation | Flat or falling prices |
| Investment returns | Low returns | High, consistent returns |
| Flexibility | Settled job and family plans | Uncertain job or location |
Price-to-Rent Ratio Rule of Thumb
Divide the home price by a year of rent. A $400,000 home that rents for $2,000 a month ($24,000 a year) has a ratio of about 16.7. Ratios under 15 often favour buying, 15 to 20 is a grey zone, and above 20 renting often looks better. Use the rent vs buy property calculator to check the full picture with your own costs.
Costs to Add Yourself
- Closing costs when you buy, often 2% to 5% of the price.
- Agent and legal fees when you sell.
- Home insurance and HOA or service charges.
- Moving costs and furniture.
- Tax benefits or costs that depend on your country and situation.
Already own and thinking about a new loan? Try the Mortgage Refinance Savings Calculator. Check your borrowing limits with the Debt-to-Income Ratio Calculator.
Frequently Asked Questions
Is it better to rent or buy a house?
It depends on how long you stay, mortgage rates, rent levels, price growth and what your down payment could earn elsewhere. Longer stays usually favour buying.
How long do I need to stay for buying to make sense?
Often five to seven years or more, because buying and selling costs need time to be covered by equity growth. The calculator lets you test your own time frame.
What does net cost of buying mean?
It is all the money you pay out as an owner, minus the equity you have built in the home at the end of the period.
Why does renting include investment gains?
Because if you rent, your down payment can be invested. Those returns are part of the true comparison.
Does the calculator include closing costs?
No. It assumes 3% yearly home appreciation and a 30-year fixed mortgage, and leaves out closing and selling costs, so add those for a short stay.
Is my data saved?
No. Everything is calculated in your browser.