Rent vs Buy Calculator
Compare the true cost of renting versus buying a home and see which option makes more financial sense.
Use it when you want to compare renting with buying over the years you plan to stay.
Rent or buy: how to read the result
When buying beats renting as the rate changes
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.
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How the estimate is calculated
Both paths start with the same cash: the down payment plus buying closing costs. The buyer puts it into the house. The renter invests it.
Each month, the renter invests the amount by which owning costs more than rent, or draws down investments when rent costs more. At the end, the buyer’s wealth is the home after selling costs and the remaining loan.
What is being compared
Buyer wealth is future home value minus selling costs minus the remaining loan. Renter wealth is the invested down payment and closing costs, adjusted every month by the cost gap between owning and renting.
Example
- Enter today’s rent and the home you would buy.
- Set how long you expect to stay.
- Edit appreciation and the investment return. Those two assumptions move the answer the most.
With the numbers filled in on this page, the estimate is $40,805.
What changes the result
How long you stay
Buying has upfront costs. A short stay often favors renting in this model.
Appreciation
The home value path is an assumption, not a prediction.
The return on savings
If the renter’s investments earn less, buying looks stronger, and the reverse is also true.
Questions
Does this predict prices?
No. You type the appreciation and the investment return.
Are income taxes included?
No. Mortgage interest and property tax deductions are not modeled.
What does the dollar result mean?
It is the gap in wealth at the end of the period, after selling the home or keeping the investments.