Rent vs Buy Calculator
Compare the total cost of renting vs. buying a home. Factors in mortgage, taxes, appreciation, investment returns, and selling costs.
Remaining loan: $272,963
Less 6% selling costs
+ monthly savings invested
at 7% annual return
Frequently Asked Questions
How does this calculator compare renting vs. buying?
It compares total wealth after a set number of years. For buying, it calculates home equity minus selling costs. For renting, it assumes you invest the down payment and any monthly savings (the difference between owning costs and rent) at a specified return rate. Whichever scenario leaves you with more wealth wins.
What costs does the buying scenario include?
Mortgage payment (principal + interest), property taxes, homeowner's insurance, HOA fees, maintenance (typically 1% of home value per year), and 6% selling costs when you eventually sell. It also credits you with home appreciation.
What does the renting scenario assume?
It assumes you invest your would-be down payment and closing costs in the stock market at the specified return rate. Each month, if owning would cost more than renting, the difference is also invested. Rent increases annually at the specified rate.
When does buying usually win?
Buying typically wins if you stay 5+ years, home appreciation is 3%+, and mortgage rates are reasonable. The longer you stay, the more buying tends to win because you build equity and your fixed mortgage payment becomes cheaper relative to rising rents. Short stays favor renting due to transaction costs.
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