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Calcora

Housing

Rent vs Buy Calculator

Compare renting with buying a home over your stay: mortgage, home equity, ownership costs, the investment opportunity cost, and break-even.

Your renting and buying assumptions

Enter what renting and buying would cost, how you expect rent, home values, and investments to grow, and how long you plan to stay. Every assumption is yours; Calcora looks nothing up.

Renting

What you would pay to rent a comparable home.

How much rent rises each year, as a percent. Use a negative number for a decrease.

Leave blank for none.

Buying

The purchase price of the home.

The cash you pay toward the price. Use 0 for none.

Use 0 for a 0% loan.

Loan term unit

How long you would repay the mortgage, in years or months.

Paid upfront as a percent of the price, not added to the mortgage.

Agent fees and other costs of selling, as a percent of the home's value when sold.

Ownership costs

Property tax, insurance, mortgage insurance, and HOA stay constant, as in the Mortgage Calculator. Maintenance follows the home's modeled value.

Leave blank for none.

Leave blank for none.

Only if it applies to your loan; charged while there is a mortgage.

Homeowners association dues, if any.

Upkeep each year, as a percent of the home's modeled value.

Growth assumptions

Assumptions, not forecasts. Each is an annual rate applied month by month.

How much the home's value changes each year, as a percent. Use a negative number for a decline.

What cash not tied up in housing earns each year, for both paths.

Time horizon
Time horizon unit

The comparison ends here, as if the home were sold. It does not have to match the loan term.

Private by design

Your rent, home price, mortgage terms, costs, and growth assumptions stay in your browser and are not sent to Calcora.

How Rent vs Buy works

  1. Start both paths with the same cash

    The buyer spends the down payment and closing costs on the home. The renter invests that same cash instead.

  2. Compare the costs month by month

    Rent and renter's insurance against the mortgage payment, property tax, insurance, mortgage insurance, HOA, and maintenance. Whichever path costs less invests the difference.

  3. Grow what changes

    Rent rises, the home's value changes, and both investment accounts earn the return you assume, each at its annual rate applied month by month.

  4. Compare where each path ends

    The renter has the investments. The buyer has the home, sold at the end, minus the mortgage still owed and the selling costs, plus any investments.

What the comparison accounts for

Why the mortgage payment alone is not enough

Rent and a mortgage payment are not the same kind of cost. Part of each mortgage payment pays down the loan and stays yours as equity, while buying adds costs rent does not: taxes, insurance, upkeep, and the costs of buying and selling.

Home equity

Equity is the home's value minus the mortgage still owed. It grows as the loan is paid down and as the value rises, and shrinks if the value falls. Selling costs come out of it when the home is sold.

Opportunity cost and invested savings

Money spent on a down payment cannot be invested elsewhere. The calculator models this directly: the renter invests the upfront cash, and each month the cheaper path invests what it saves.

Home appreciation

How much the home's value changes each year. It is the assumption that moves the result most, and values can fall as well as rise.

Rent growth

Rent usually rises over time, which makes renting more expensive each year while a fixed-rate mortgage payment stays the same.

Maintenance and ownership costs

Owners pay property tax, insurance, HOA dues, and upkeep. Maintenance is modeled as a share of the home's estimated value, so it rises when the value does.

Buying and selling transaction costs

Closing costs at purchase and selling costs at the end are why buying usually starts behind: a home sold soon after it is bought loses both.

Break-even point

The first month at whose end buying's net position, as if the home were sold then, moves ahead of renting's. Short stays often end before it; it can also never come.

What the model does not include

  • Tax deductions for mortgage interest or property tax, and taxes on investment gains or home sales
  • Renovations and improvements, and any value they add
  • Refinancing, adjustable rates, and paying the mortgage off early
  • Rising property tax, insurance, or HOA dues
  • Moving costs, security deposits, and differences between the homes

Example comparison

$2,000 a month in rent rising 3% a year, against a $400,000 home with $80,000 down at 6.5% over 30 years, $4,800 of property tax and $1,800 of insurance a year, $100 of HOA a month, 1% maintenance, 3% closing and 6% selling costs, 3% appreciation, and a 5% investment return. Calculated the same way as the calculator above.

After 7 years

Renting position (investments)
$210,802.97
Home value
$491,949.55
Mortgage balance
$289,331.75
Selling costs
$29,516.97
Buying position (net home proceeds)
$173,100.83

Renting is ahead by $37,702.14 under these assumptions.

How it starts

Upfront cash
$92,000.00
Closing costs
$12,000.00
First month: renting
$2,020.00
First month: owning
$3,005.95
Break-even
Buying ahead after 15 years, 1 month

At purchase, buying starts $36,000.00 behind: selling right away would lose the $12,000.00 of closing costs and $24,000.00 of selling costs. The break-even point shown is over a 20 years comparison.

Renting position, buying position, and which path is ahead for each stay in the example
StayRenting positionBuying positionAhead
3 years$141,857.69$102,330.27Renting
7 years$210,802.97$173,100.83Renting
15 years$353,723.87$353,607.19Even
20 years$451,793.58$510,390.18Buying

Assumptions

  • This is an educational comparison based on the values you enter. It is not a recommendation to rent or buy, and actual costs, returns, and home values will differ.
  • Both paths start with the same cash: the down payment plus buying closing costs. The buyer spends it; the renter invests it.
  • The mortgage payment, interest, and balance come from Calcora's amortization engine, as in the Mortgage Calculator. Closing costs are paid upfront and not financed.
  • Property tax, homeowners insurance, and HOA are constant monthly equivalents (annual amounts ÷ 12). Mortgage insurance is the amount you enter, charged while there is a mortgage and never inferred from the down payment.
  • Maintenance each month is the home's value at the start of the month × the maintenance rate ÷ 12, rounded to the cent.
  • Rent growth, home appreciation, and investment returns are effective annual rates applied monthly: a value after m months is the starting value × (1 + rate)^(m ÷ 12). A year at 3% is exactly 3%.
  • Each month, both investment accounts earn a month of the return first, then the path whose costs were lower invests the difference at the end of the month.
  • Each net position assumes the home is sold at that point: home value − mortgage balance − selling costs + the buyer's investments, against the renter's investments. Selling costs are charged once, at the value at that time.
  • Taxes on income, investment gains, or home sales, and tax deductions are not modeled.

How Calcora calculates

  • Every calculator explains the formula behind its result in plain language.
  • Calculators are designed to run in your browser, so your inputs are not sent to Calcora.
  • Results help you understand your options. They are not financial advice.
Read the methodology

Frequently asked questions

Is renting throwing money away?
Not necessarily. Rent buys housing, just as mortgage interest, taxes, insurance, and upkeep do for an owner. What matters is how each path's money ends up: equity in a home, or investments.
Why does buying usually start behind?
Because a home sold right after purchase loses the closing costs and the selling costs. Buying has to make up that gap through home equity and any savings before it moves ahead.
Why is the down payment invested on the renting side?
To compare the same money. The buyer puts the down payment and closing costs into the home; a renter with the same cash could invest it, so the calculator does.
What if buying costs less each month than renting?
Then the buyer invests the difference. Whichever path costs less in a month invests what it saves, so neither side is assumed to be the only one saving.
Which assumptions matter most?
Usually home appreciation, how long you stay, the investment return, and the gap between rent and the cost of owning. The comparison tables show how each one changes the result.
Does the calculator include tax benefits?
No. Mortgage interest and property tax deductions, and taxes on gains, depend on your tax situation, so they are left out.
Does Calcora store my information?
No. The calculation runs in your browser. Your rent, home price, mortgage terms, costs, and assumptions are not sent to Calcora or saved, and they are cleared when you leave or reload the page.

Related calculators

To see the monthly payment for a home in detail, use the Mortgage Calculator. To estimate a home price from your income and debts, use the Home Affordability Calculator.