How the Rent vs Buy Calculator works
Compare the estimated cost of renting vs buying. Adjust the inputs above, then use the calculate button to generate a fresh estimate based on the numbers you entered.
The result is designed to give you a quick planning number, plus a short breakdown of the major figures behind it. You can reset the form at any time and try a different scenario.
When to use this calculator
Use this rent vs buy calculator when you are deciding whether buying a home may make sense compared with continuing to rent. It is most useful for a specific time horizon because buying often has higher upfront costs while renting can be more flexible.
Formula
Comparison = estimated rent cost over time vs estimated ownership cash cost over time
- Rent is the monthly rental payment.
- Home price and down payment determine the mortgage amount.
- Rate and comparison years estimate ownership payments over the period.
- The result is simplified and does not model home price appreciation or investment returns.
Worked example
If rent is $2,200 per month and a home costs $550,000 with a $100,000 down payment, the calculator compares estimated rent cost with ownership cash costs over 5 years.
Common mistakes
- Ignoring transaction costs such as land transfer tax, legal fees and moving costs.
- Assuming home prices always rise over your exact timeline.
- Forgetting the value of flexibility if you may move soon.
FAQs
Does buying always build wealth faster?
No. It depends on price, rent, rates, time horizon, maintenance, market changes and what you do with money not used for buying.
Why does time horizon matter?
Buying has upfront costs. A longer timeline gives more time to spread those costs out.
Does this include appreciation?
No. This simplified comparison focuses on cash costs and excludes home price appreciation and selling costs.