Common question
Should I rent or buy?
Rent or buy is a comparison of two paths over the years you choose. One path buys with the price, down payment, and rate you enter. The other keeps paying the rent you enter and invests the cash difference.
If one path is ahead, that is the result for those inputs. It is an estimate, not a forecast of home prices and not advice to sign a lease or a purchase contract.
Renting is ahead by $40,805.
Compare scenarios
What if you stay longer, or prices rise faster?
How we calculated this
Both paths start with the same cash: the down payment plus buying closing costs. Buying turns that into a home. Each month, the renter invests the gap when owning costs more, or withdraws from investments when rent costs more. At the end, the buyer’s wealth is the home value after selling costs and the remaining loan. The renter’s wealth is the investment balance.
What does this mean?
After 7 years at these assumptions, renting and investing the difference leaves about $40,805 more wealth than buying.
Your assumptions
Edit assumptions- Starting rent
- $2,200.00
- Rent growth
- 3.00% / year
- Home price
- $450,000
- Appreciation
- 3.00% / year
- Investment return
- 5.00% / year
- Years
- 7
- PMI
- Not included
This comparison uses the appreciation and investment return you enter. It is not a forecast. Taxes, repairs, and moving sooner can change the outcome.
How the estimate is calculated
Both paths start with the same cash: the down payment plus buying closing costs. Each month, owning costs principal and interest, tax, insurance, maintenance, HOA, and PMI while the loan is above 80% of the original price.
When owning costs more than rent, the renter invests the gap at the return you enter. At the end, the buyer’s wealth is the home value after selling costs and the remaining loan. The renter’s wealth is the investment balance. Appreciation and the investment return are numbers you type.
Open the Rent vs Buy Calculator · How this calculator works · Rent or buy: how to read the result
When buying beats renting as the rate changes
Questions
Does this predict what homes will be worth?
No. You enter the appreciation and the investment return. Change either one and the lead can move.
Which input should I change first?
The rate, the years you plan to stay, and the home price usually move the result more than a small change in insurance.
Are taxes on the sale or on mortgage interest included?
No. Income taxes and deductions are not part of this comparison.
What if I might move sooner?
Shorten the years. Selling costs are applied at the end of the period you enter, so a short stay often favors renting.