Rent vs Buy Calculator

A rent vs buy calculator projects the total cost of renting and the total cost of owning over a chosen time horizon. On the buying side, it adds mortgage payments, property tax, insurance, maintenance, and HOA. On the renting side, it adds rent (typically increasing each year) and assumes the down payment plus any monthly cash-flow savings are invested at a market rate of return. The calculator finds the break-even year and reports which choice appears financially better at the end.

It depends on how long you plan to stay, mortgage rates, home appreciation, rent inflation, and expected investment returns. A common rule of thumb is that buying makes more sense the longer you plan to stay in the same home. Shorter time horizons (under 3 to 5 years) usually favor renting because upfront closing and selling costs are a large percentage of any equity gained.

The 5% rule is a shortcut suggesting that if annual rent is less than 5% of the home price, renting is often the better financial choice. The 5% is a rough sum of property tax (~1%), maintenance (~1%), and lost opportunity on the down payment (~3%). It is a starting point, not a rule — this calculator gives you a more precise year-by-year answer with your exact numbers.

Not upfront closing costs explicitly, but at sale the selling costs percentage covers realtor commissions, transfer taxes, and typical closing fees. You can add a rough closing-cost estimate to the down payment field to be more conservative. For a full picture, subtract several thousand dollars of upfront closing costs from the buyer’s net position at the end.

No. This calculator provides educational estimates only. It is not financial, tax, real-estate, or investment advice. Local markets, credit terms, personal taxes, and household circumstances all matter and vary widely. Consult licensed professionals such as a real-estate agent, mortgage broker, tax advisor, and financial planner before making major property decisions.