Rent vs. Buy Calculator
Compare the long-term financial impact of renting versus buying a home.
Should You Rent or Buy?
The rent vs. buy decision is one of the most significant financial choices you will make. This calculator compares the total cost of renting (rent payments over time) against the total cost of buying (mortgage payments, maintenance, taxes, insurance, and closing costs minus equity built and appreciation). The answer depends heavily on your local market, how long you plan to stay, and your opportunity cost of capital.
How to Use This Calculator
Enter Your Monthly Rent
Input your current or expected monthly rent. This will be projected forward with assumed annual increases.
Enter the Home Purchase Price
Input the price of a comparable home to what you would be renting.
Set Mortgage Details
Enter your expected down payment and mortgage interest rate.
Choose Your Time Horizon
How long do you plan to stay? Buying rarely makes sense for less than 5 years due to transaction costs.
Key Concepts
The 5-Year Rule
Due to closing costs (3-6% of home price on both sides), buying typically only makes financial sense if you stay at least 5-7 years.
Home Appreciation
Historically, homes appreciate 3-4% annually (national average). But this varies wildly by market, and there is no guarantee of appreciation.
Hidden Costs of Ownership
Beyond the mortgage: property taxes (1-2% of value/year), insurance, maintenance (1% of value/year), HOA fees, and major repairs.
Opportunity Cost
A large down payment could be invested instead. At 7% annual returns, $80,000 invested grows to $157,000 in 10 years. Compare that growth to home equity.
Expert Insights
In high-cost, high-appreciation markets (SF, NYC), renting and investing the difference can often beat buying. In lower-cost, stable markets (Midwest, South), buying tends to win.
Do not forget closing costs on both ends: 2-5% to buy and 6-10% to sell. On a $400,000 home, that is $32,000-$60,000 in transaction costs that must be recouped through appreciation.
Renting offers flexibility and limited financial liability. If your career may require relocation within 5 years, renting is almost always the better financial and lifestyle choice.
Frequently Asked Questions
This calculator provides estimates for educational purposes only. Actual results depend on your specific financial situation, lender terms, and market conditions. Consult a qualified financial advisor before making major financial decisions.
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Compare mortgage rates and lenders to find the best deal if buying is right for you.
Compare Mortgage RatesEconomic Snapshot
Source: Federal Reserve Economic Data (FRED). Indicators refresh daily.
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Apr 9, 2026Federal Reserve Board announces termination of enforcement actions with Crédit Agricole S.A. and Crédit Agricole Corporate and Investment Bank, Mega International Commercial Bank Co., Ltd, and the Goldman Sachs Group, Inc.
FRB: Press Release - All ReleasesHeadlines sourced from government agencies and legal publications. Updated every 12 hours.
Did You Know?
The average credit card interest rate hit 22.76% in 2025 — the highest since tracking began in the early 1990s.
BNPL (Buy Now, Pay Later) usage tripled between 2020 and 2025, with over 40% of U.S. consumers having used it.
Cost of living varies dramatically: the same salary goes 30-50% further in states like Texas or Tennessee vs. California or New York.
The average 401(k) balance hit $118,600 in 2025, though the median is much lower at $35,286.