How the rent vs buy calculator works
Enter your monthly rent, the home price, down payment, mortgage rate, and how long you plan to stay. The calculator totals what renting costs over that period — rent paid, with annual increases — against the full cost of owning.
Owning includes the mortgage, taxes, insurance, and maintenance — offset by the equity you build and any growth in the home's value. The difference is your true winner.
Worked example: buying wins by $166,939 over 10 years
Compare $1,800 monthly rent against a $400,000 home bought with 10% down and a 6.5%, 30-year mortgage. Over 10 years, buying comes out ahead by about $166,939 — driven by $232,372 in equity built through payments and price growth.
Rent builds zero equity — every payment is gone for good. That gap is why buying often wins for people who plan to stay put for several years.
What to watch out for
This comparison assumes you stay the full period. Selling early means closing costs and agent fees eat the equity you built — buying usually needs five to seven years to pull ahead.
Also budget for maintenance — roughly 1% of the home's value per year — which renters never pay. Results are estimates for planning, not financial advice.
Frequently asked questions
Is it better to rent or buy right now?
It depends on your timeline and local market. Buying usually wins if you'll stay five-plus years and the monthly costs fit your budget. Renting wins for flexibility, short stays, or when home prices look stretched in your area.
How long should I stay for buying to make sense?
Most analyses point to five to seven years. Before that, closing costs, agent fees, and early mortgage payments — which are mostly interest — haven't had time to be outweighed by the equity you've built.
What costs do first-time buyers forget?
Closing costs (2% to 5% of the price), moving expenses, immediate repairs, furniture, and ongoing maintenance. Property taxes and insurance can also rise yearly. Budget an extra 1% to 2% of the home's value annually for surprises.
Does the calculator include home price growth?
Yes — it factors in expected annual appreciation alongside your equity from mortgage payments. You can adjust the growth assumption to test conservative and optimistic scenarios and see how sensitive the answer is.