Rent vs Buy Calculator

How to Use This Rent vs Buy Calculator

Enter your current monthly rent, the purchase price of the home you're considering, your planned down payment percentage, and the current mortgage interest rate. The calculator compares total monthly costs of renting vs. buying, including mortgage, property taxes (estimated at 1%), insurance (0.4%), and maintenance (1% of home value per year).

Rent vs Buy Formula

This calculator compares the total financial impact of renting vs buying. It accounts for mortgage payments, property taxes, maintenance, home appreciation, tax deductions, and the opportunity cost of your down payment.

Worked Example

You're paying $2,200/month in rent and considering buying a $400,000 home with 20% down ($80,000) at 6.5% interest. Monthly mortgage P&I: $2,023. Add property tax ($333/mo), insurance ($133/mo), and maintenance ($333/mo) = total $2,822/month to buy vs. $2,200/month to rent. Buying costs $622 more per month, but you're building equity and may benefit from appreciation and tax deductions.

What is a Good Rent vs Buy?

The rent-vs-buy decision depends on how long you plan to stay, local market conditions, and your financial goals. Generally, buying makes more sense if you'll stay 5+ years (to recoup closing costs), if the price-to-rent ratio is below 20, and if you value building equity. Renting makes more sense for flexibility, if the market is overpriced, or if you can invest the difference at higher returns. There's no universal answer: it depends on your specific numbers.

Factors That Affect Rent vs Buy

Key factors: how long you'll stay (buying has high upfront costs that take years to recoup), interest rates (dramatically affect monthly payments), local appreciation rates, opportunity cost of your down payment (what could you earn investing it instead?), tax benefits of homeownership (mortgage interest deduction, property tax deduction up to $10,000 SALT cap), and lifestyle preferences (maintenance responsibility, flexibility to move).