Rent Vs Buy
Rent versus buy is rarely answered by comparing mortgage payment to rent alone. Ownership adds taxes, insurance, maintenance, and illiquid equity; renting trades flexibility for predictable recurring cost. This page frames both sides with numbers you can adjust as your market and timeline change.
Quick answer
Enter current or target rent, purchase price, down payment, rate, expected annual home cost (tax, insurance, maintenance), and how many years you might stay. The tool contrasts cumulative outflows and equity buildup under each path—use it to find your break-even horizon, not a single yes/no.
For a related estimate, see 20 Percent Down Calculator.
Explore further: Biweekly Mortgage Calculator · Closing Cost Calculator
How to use this calculator
- Lock the rent baseline: Use real lease renewal numbers; add renters insurance if you carry it.
- Build the own-side stack: Separate P&I from taxes, insurance, HOA, and maintenance—lumping them hides what actually drives monthly load.
- Set appreciation and rent growth honestly: Small assumption changes swing long horizons; run a conservative and a moderate case side by side.
Renting vs owning: what belongs in the comparison
Rent usually stacks: monthly rent plus renters insurance and move-in costs; it avoids many repair bills but does not build equity. Owning stacks: principal and interest, property taxes, homeowners insurance, maintenance, HOA (if any), and upfront closing costs—plus opportunity cost of your down payment. Appreciation and principal paydown can offset those costs, but only over a long enough horizon and with realistic upkeep assumptions.
Explore further: Debt To Income Calculator · Down Payment Calculator
Rent vs Buy Comparison
Renting: - Monthly cost: $2,400/mo (rent + renters insurance placeholder) - Flexibility: high (lease term aside) - Equity: none from rent payments - Risk: mostly predictable; rent can step up at renewal Buying: - Monthly cost: ~$3,050/mo all-in early years (PITI + maintenance reserve) - Flexibility: lower (selling has friction and fees) - Equity: builds via principal paydown; price change adds or subtracts - Risk: higher cash at close; repair spikes; rate fixed on P&I but tax/insurance move
Real-world example
- Example: $2,400/mo rent vs $450k buy, 7-year horizon: Rough sketch: $2,400/mo rent ≈ $200k outflows over 7 years before insurance. Buying might show ~$3,100/mo all-in early years (P&I + tax + insurance + maintenance placeholder)—higher cash flow now, partial principal recovery later. Whether buy wins depends on appreciation, tax deductions you actually use, and repair luck (illustrative only). In this scenario, renting keeps more cash in hand for roughly the first 5–6 years; buying becomes the stronger total-cost path after about year 7 if you stay put, because principal paydown and a typical inflation-level price path compound while rent keeps stepping up.
Explore further: Home Affordability With Taxes · Home Loan Calculator
What this means
Benchmark the decision on stay length: under ~3–5 years, renting often wins on total cash and flexibility after closing costs. Beyond ~7–10 years, owning frequently wins on net worth if the payment is sustainable—because rent tends to rise while a fixed-rate P&I slice stays flat and principal turns into equity.
FAQ
What is the biggest blind spot in rent vs buy models?
Ignoring maintenance and turnover costs on the own side, or assuming you will move before closing costs are recovered.
Does the down payment count as a “cost”?
It is upfront cash and has opportunity cost—even if it becomes equity, it is not free money the day you close.
Does a lower mortgage rate always make buying win?
No. Closing costs, taxes, insurance, maintenance, and how long you stay often matter more than a small rate edge.
Should I trust a single “winner” number?
Treat the model as sensitivity analysis: if small changes in rent growth or home appreciation flip the answer, you are in a borderline zone.