Home Rent vs Buy Calculator

The rent-vs-buy decision usually gets reduced to a mortgage payment versus rent comparison, but that misses the two biggest factors: what your down payment could earn if you invested it instead, and how much of your mortgage payment builds equity versus disappears into interest, taxes, and upkeep.

This calculator runs the comparison the way professional tools do: it simulates both paths month by month over however long you plan to stay, and compares your ending net worth — home equity if you buy, versus an investment account funded by everything you didn't spend on housing if you rent.

How does this calculator work?

Enter the home you're considering, your mortgage terms, and ongoing ownership costs (tax, insurance, HOA, maintenance), then the rent and terms for the equivalent rental. The calculator assumes you have the same monthly housing budget either way: if buying costs more in a given month, that's money the renter keeps and invests; if renting costs more, that comes out of the renter's investment account instead.

The renter's investment account also starts with a head start equal to the down payment and closing costs — money the buyer spends upfront and the renter doesn't — growing at your assumed investment return for the entire period.

At the end of your time horizon, buying's net worth is the home's appreciated value minus what's still owed on the mortgage and minus the cost of selling (agent commission, etc.); renting's net worth is simply the investment account balance. Whichever is higher wins, and the calculator also flags the approximate year the two cross over, if they do within your horizon. If buying wins, size the payment with the Home Loan Calculator.

Worked example

A $400,000 home with 20% down, a 6.75% 30-year mortgage, versus renting an equivalent home for $2,200/month, over a 10-year horizon.

Cash needed to buy today

$92,000 (down payment + closing costs)

Initial monthly cost to buy

≈$2,700 (P&I + tax + insurance + maintenance)

Initial monthly cost to rent

≈$2,220

Renter's investment head start

$92,000, growing at the assumed return

How the numbers work

Because buying costs more per month at the start, the renter invests that gap every month on top of the $92,000 head start — so renting looks ahead for the first several years.

As the mortgage balance shrinks and the home appreciates, the buyer's equity grows faster than the renter's monthly contributions can keep pace, typically closing the gap somewhere in the middle of a 10-year horizon (the exact year depends heavily on your appreciation and investment-return assumptions). Once you're ready to run real numbers, the Home Affordability Calculator sets a realistic price ceiling first.

Rent-vs-buy is genuinely sensitive to how long you stay — the longer the horizon, the more time equity and appreciation have to compound past what renting-and-investing can match, since buying's biggest costs (closing costs, agent commission on sale) are one-time and get amortized over more years. Whichever way you lean, the Closing Costs Calculator itemizes exactly what buying would cost you upfront.