Rent vs Buy Calculator
🏠 Free ToolCompare the true cost of renting versus buying a property over any time horizon. Factor in mortgage rates, property appreciation, rent increases, and maintenance to find your breakeven year.
How it Works
The rent vs buy calculator helps you make one of the biggest financial decisions: whether to rent or purchase your home. By modeling both scenarios over your chosen time horizon, you can see which option costs less in the long run.
On the buying side, the calculator accounts for your down payment, monthly mortgage payments (principal and interest), and annual maintenance costs. It also tracks how your equity grows as you pay down the mortgage and the property appreciates in value.
On the renting side, it models your monthly rent with annual increases, reflecting the reality that rents typically rise over time. The cumulative rent cost is compared against the net cost of buying (total payments minus equity gained).
The breakeven chart visually shows when buying overtakes renting as the more economical choice. If you plan to move before the breakeven year, renting may be the smarter financial decision. If you plan to stay longer, buying builds wealth through equity.
Frequently Asked Questions
How does the rent vs buy comparison work?
The calculator computes the total cumulative cost of buying (mortgage payments, maintenance, down payment) and renting (monthly rent with annual increases) over your chosen time horizon, then subtracts the equity you build through buying to find the net cost of each option.
What is the breakeven year?
The breakeven year is when the net cost of buying (total costs minus equity built) becomes lower than the cumulative cost of renting. Before this point, renting is cheaper; after it, buying wins financially.
What assumptions does this calculator make?
It assumes constant mortgage rate, steady annual property appreciation, steady rent increases, and a fixed maintenance percentage. Real-world conditions may vary, so use this as a guide rather than a precise prediction.
How does property appreciation affect the result?
Higher appreciation increases your equity faster, making buying more attractive. Even 1-2% annual appreciation compounds significantly over 10-20 years, potentially turning an expensive purchase into a profitable one.
Should I consider opportunity cost of the down payment?
Yes. The down payment could be invested elsewhere. If stock market returns exceed property appreciation plus rental savings, renting and investing might be better. This calculator focuses on direct housing costs.
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