Rent vs Buy Calculator
Visualize your net worth over time by comparing the long-term financial impact of buying a home versus renting and investing the difference.
How to Use This Calculator
- 1
Input Home Details
Enter home price, closing costs, and mortgage terms.
- 2
Input Rental Details
Enter comparable monthly rent, renter's insurance, and expected rent growth.
- 3
Set Market Assumptions
Adjust home appreciation and investment return rates to match your outlook.
- 4
Compare Net Worth
View the chart to see which path builds more wealth and when the breakeven year occurs.
Frequently Asked Questions
How is the breakeven year calculated?
It is the year where the homeowner's net worth (home equity minus all ownership costs) exceeds the renter's net worth (the down payment and monthly savings invested in the market instead). Before that year, renting would have left you wealthier; after it, buying wins.
What is opportunity cost in a rent vs buy decision?
Opportunity cost is the return your down payment could have earned if invested elsewhere, such as an index fund. A $60,000 down payment growing at 7% per year would be worth about $118,000 after 10 years — the calculator credits this to the renting scenario.
Why does renting sometimes beat buying?
When home price growth is low, interest rates are high, or you move within a few years, the transaction costs and interest of buying can outweigh the equity you build. Buying usually wins with long holding periods and reasonable price appreciation.
Which costs of ownership does the comparison include?
The model includes mortgage interest and principal, purchase closing costs, property tax, insurance, maintenance, and selling costs, and compares them against rent, renter's insurance, and rent inflation over time.
Rent vs Buy Analysis
Deciding between renting and buying is a complex financial decision involving opportunity costs, equity buildup, and market appreciation.
Our calculator compares your net worth over 30 years in both scenarios, accounting for investment returns on the difference in monthly costs.
Breakeven Year
Time required for buying to become cheaper than renting.
Net Worth Gap
The difference in total wealth after 30 years.
Opportunity Cost
Potential returns lost by locking cash in a down payment.