Rent vs Buy Calculator

It compares modeled net worth at the end of your chosen horizon. The buyer has home sale proceeds after the mortgage and selling costs, plus investments made when owning was cheaper that month. The renter invests the avoided down payment and buying costs, plus monthly savings when rent was cheaper.

It is counted as monthly cash outflow but not lost: paying principal reduces the loan balance and therefore increases sale equity. Treating the whole mortgage payment as an expense while also crediting equity would count principal twice; ignoring the cash payment would make the monthly opportunity-cost comparison unfair.

It is the first whole year after which modeled buying wealth stays at least as high as modeled renting wealth through the selected horizon. It is not a promise or a universal minimum stay. Changing appreciation, rent growth, transaction costs, or investment return can move it or remove it entirely.

No. Mortgage-interest and property-tax effects depend on jurisdiction, filing status, itemization, other deductions, legal caps, and future tax law. A generic tax benefit would create false precision. Use after-tax costs from a qualified adviser if taxes materially change your personal comparison.

Use scenarios, not a single historical average. FHFA publishes local and national repeat-sales house-price indexes, but one home can differ from its region. Investment returns are also volatile. Run low, central, and high cases, including a home-price decline and a weak investment outcome.

Utilities shared by both choices, moving, renovations, one-off repairs beyond the maintenance reserve, renter insurance unless added to rent, tax effects, assessments, financing changes, and the personal value of stability or flexibility. Add differing recurring costs to the nearest input and review one-off costs separately.