Rent vs Buy Calculator
Enter the home you would buy, the rent you would pay instead, and how long you plan to stay. The calculator compares total costs — including the hidden ones — and gives a verdict.
| Net cost of buying | — |
| Net cost of renting | — |
| Difference | — |
What the comparison actually includes
Buying: down payment, ~3% closing costs, mortgage payments, and ~2.5% of home value per year for property tax, insurance, and maintenance — minus what you get back when selling (appreciated value, less 7% selling costs and the remaining loan).
Renting: rent growing yearly, minus the growth your down-payment money earns when invested safely instead (4% assumed).
The two numbers that decide almost every case
- Time horizon: buying loses almost always under 4–5 years — closing and selling costs (~10% of the price combined) need years of equity growth to recover. Past 8–10 years, buying usually wins.
- Price-to-rent ratio: home price ÷ yearly rent. Under 15, buying is favored; over 20 (typical of expensive coastal cities), renting often wins mathematically even long-term.
What no calculator prices: the freedom to move for a better job (renting) vs stability and no-landlord life (owning). Use the math as the floor, not the whole decision.
Frequently asked questions
Is it cheaper to rent or buy?
Depends mostly on how long you stay and the local price-to-rent ratio. Under ~5 years, renting usually wins because buying and selling costs eat the equity. Run your own numbers above for the actual verdict.
What is the price-to-rent ratio?
Home price divided by a year of comparable rent. $350,000 ÷ ($1,800 × 12) ≈ 16 — a middle zone. Under 15 favors buying; over 20 favors renting.
What hidden costs does buying have?
Closing costs (2–5%), property tax, insurance, maintenance (1–2% of home value yearly), HOA fees, and 6–8% selling costs at exit. Together they are why short ownership loses to renting.
Does this include the opportunity cost of the down payment?
Yes — the renting side credits your down-payment money growing at a safe 4% instead of being locked in the house. Investing it in stocks would favor renting even more strongly, with more risk.
All Loans & Debt calculators
15 vs 30 Year Mortgage · Amortization · Balance Transfer · Buy Now Pay Later · Car Affordability · Car Depreciation · Car Loan · Credit Card Minimum Payment · Credit Utilization · Debt Snowball vs Avalanche · Debt-to-Income (DTI) Ratio · Down Payment · HELOC Payment · Home Equity Loan · Lease vs Buy Car · Loan Comparison · Loan Payoff · Mortgage Affordability · Mortgage Payment · Mortgage Points · Negative Equity · Payday Loan APR · Personal Loan · Refinance Break-Even · Student Loan Payoff
Last updated: 2026-07-08