Rent vs Buy Calculator
Compare the cost of renting with buying a home over the years you plan to stay.
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How to do it
- 1Fill in the boxes
Type your numbers or pick the options you need.
- 2See the result
The answer updates right away as you change a value.
- 3Use it
Copy the result or note it down. Nothing is sent anywhere.
About this tool
Enter the home price, down payment percent, mortgage rate, current rent, years you will stay, price growth and property tax rate. The calculator compares net ownership cost (interest, tax, upkeep, selling and buying costs, minus price gain) with the rent you would pay.
What it compares
Ownership costs include mortgage interest, property tax, upkeep of 1 percent a year, closing costs and 6 percent selling costs, offset by any rise in home value. Renting costs the rent, rising 3 percent a year. Principal repaid is not a cost because it builds equity you get back.
Example
For a $400,000 home with 20 percent down at 6.5 percent against $2,200 rent over seven years, the result depends strongly on price growth, which is why the tool lets you change it.
Tips
The longer you stay, the better buying tends to look because the one-off costs spread out. Include the return you could earn by investing the down payment as a comparison.
Frequently asked questions
How long should I stay for buying to win?
Usually five to seven years or more, because buying and selling costs are large.
Does it include investing the down payment?
No. Compare the equity figure against what the same money could earn elsewhere.
Are taxes and insurance included?
Property tax and 1 percent for upkeep are included. Add insurance if it is high.
Is the home price growth reliable?
No. Test 0, 3 and 5 percent growth to see the range.