Compare the net cost of buying with the rent you would pay over the same years.
Down payment of 60,000 dollars is excluded from both sides; invest it in the rent case for a fair comparison.
Please do not make financial decisions based on these results.
What is the Rent or Buy Calculator?
Compare the net cost of buying with the rent you would pay over the same years. To use the Rent or Buy Calculator, enter home price, down payment, mortgage rate, property tax and insurance per year, maintenance per year, appreciation per year and a few more values; it returns net cost of buying, rent paid over the period, home value at the end, and shows them instantly as you type.
Understanding home financing
Buying or financing a home involves a handful of numbers that interact: the price, the down payment, the interest rate, the loan term and the ongoing costs of ownership. The mortgage calculator combines them into a monthly payment, while the amortization calculator shows how each payment is split between interest and principal.
Costs beyond the loan
Property taxes, homeowners insurance, mortgage insurance, association dues and maintenance all add to the monthly cost of owning. Lenders also look at your debt-to-income ratio and your savings, so check what you can afford with the house affordability calculator before you start house hunting.
Changing the loan later
Once you own, you may want to lower the rate, shorten the term or borrow against your equity. The refinance calculator and the mortgage payoff calculator help you compare those choices with the loan you already have.
How to use the Rent or Buy Calculator
- Enter your numbers. The inputs are Home price ($), Down payment (%), Mortgage rate (%), Property tax and insurance per year (%), Maintenance per year (%), Appreciation per year (%), Monthly rent ($). Use figures from a lender quote or your tax bill where you have them, and keep the term and rate realistic. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Net cost of buying, and the cards below show Rent paid over the period, Home value at the end. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Rent or Buy Calculator using the default values shown in the calculator above:
Inputs
| Home price ($) | 400,000 |
|---|---|
| Down payment (%) | 15 |
| Mortgage rate (%) | 6.5 |
| Property tax and insurance per year (%) | 1.5 |
| Maintenance per year (%) | 1 |
| Appreciation per year (%) | 3 |
| Monthly rent ($) | 2,200 |
| Rent growth per year (%) | 3 |
| Years | 7 |
Results
| Net cost of buying | $161,984.31 |
|---|---|
| Rent paid over the period | $202,289.00 |
| Home value at the end | $491,949.55 |
With these inputs the calculator returns Net cost of buying: $161,984.31. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Home price ($) from 400,000 to 480,000 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Net cost of buying | $161,984.31 | $194,381.18 | +20% |
| Rent paid over the period | $202,289.00 | $202,289.00 | 0% |
| Home value at the end | $491,949.55 | $590,339.46 | +20% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Rent or Buy Calculator reports Net cost of buying, rent paid over the period and home value at the end. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. The result is only as accurate as the numbers you enter and the formula shown above. It is for information, not financial, tax or legal advice.
Frequently asked questions
When does buying beat renting?
Usually after five to seven years, depending on price growth, rates and rent growth.
How much house can I afford?
A common rule is to keep housing costs under about 28% of gross income and total debt under 36%. The House Affordability Calculator applies those limits to your numbers.
Are property tax, insurance and PMI included?
Yes, this calculator includes property tax and home insurance. Enter your own local figures because they vary by county, insurer and lender.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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