Rent vs Buy Calculator

Make an informed decision about one of life's biggest financial choices. Compare the true costs of renting versus buying a home.

This calculator compares buying a home versus renting and investing the difference. It accounts for mortgage payments, property taxes, maintenance, home appreciation, investment returns, and tax benefits. The results show your net wealth after your chosen time horizon, helping you make the best financial decision for your situation.

Calculator Inputs

Load typical values for your area

$
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💡 Check today's rates →

How long do you plan to stay?

$

Property Costs

%

Preset default: 0.73%

%

CA Prop 13 limits to 2% annually

$

Preset default: $470

%

Percentage of home value annually

Transaction Costs

%

Preset default: 3.0%

%

Preset default: 7.0%

Market Assumptions

%

Preset default: 4.5%

%

Preset default: 3.0%

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Stock market average return

Tax Calculations

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Your tax bracket for deductions

Subject to standard deduction limits

Results

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Equal Monthly Budget Assumption

This comparison assumes you have the same monthly budget for both scenarios. When buying costs more per month, the renter invests the difference in the stock market.

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BUYING

$1,699,892

Home Equity Value

Monthly P&I:$4,804
Total Interest:$815,948
Total Property Tax:$168,502
Net Result = What you get back minus expenses that are GONE forever (interest, taxes, HOA, maintenance, selling costs)

Total Invested

Down payment:$190,000
Closing costs:$28,500
Principal payments:$336,944
Total invested (in equity):$555,444

Total Costs Over Time

Total interest paid:$815,948
Total property tax:$168,502
Total HOA fees:$112,800
Total maintenance & insurance:$304,127
Selling costs:$159,792
Less: Tax savings:($236,268)
Total pure expenses:$1,324,901

Home's Value After 20 Yrs

Home market value:$2,282,740
Remaining mortgage:($423,056)
Selling costs:($159,792)
Final home equity:$1,699,892

Net Result Calculation

Final equity:$1,699,892
Minus pure expenses:($1,324,901)
= Net Wealth (After 20 Yrs):+$374,991
Note: Down payment and principal payments are not subtracted because they're already part of your equity
đŸĸWinner

RENTING + INVESTING

$2,433,019

Investment Portfolio Value

Starting Rent:$3,800/mo
Final Rent:$6,663/mo
Total Invested:$218,500
Net Result = What you get back minus pure expenses (rent paid - money that's gone forever)

Total Invested

Initial investment:$218,500
Monthly contributions:$276,764
Total invested (in portfolio):$495,264

Total Costs Over Time

Total rent paid:$1,225,289
Total pure expenses:$1,225,289

Portfolio's Value After 20 Yrs

Initial investment:$218,500
Monthly contributions:$276,764
Investment returns:+$1,937,755
Final portfolio value:$2,433,019

Net Result Calculation

Final portfolio:$2,433,019
Minus rent paid:($1,225,289)
= Net Wealth (After 20 Yrs):+$1,207,730
Note: Initial investment and monthly contributions are not subtracted because they're already part of your portfolio

Renting + Investing has a better net result by $832,739

Net Result = What you get back minus what you put in over 20 years

📋 Affiliate Disclosure: This page contains affiliate links. If you click through and make a purchase or open an account, we may earn a commission at no additional cost to you. This helps us maintain this free calculator tool.

Maximize Your Investment Strategy While Renting

Based on your analysis, renting and investing appears to be the better financial choice for you.

Open an investment account and start building your portfolio while you rent.

Helpful Resources to Get Started

Check Your Credit Score

See your credit score and get tips to improve it before applying for a mortgage. A higher score means better rates.

Compare Mortgage Rates

See current rates from top lenders and get pre-qualified in minutes.

View Rates →

Browse Properties

Explore homes in your area that match your budget and preferences.

Start Investing

Open an investment account and start building wealth for your future.

Should You Rent or Buy a Home?

The decision to rent or buy a home is one of the most significant financial choices you'll make. Our free rent vs buy calculator helps you compare the true costs of renting versus buying, including factors like mortgage payments, property taxes, maintenance costs, and investment returns.

When Buying a Home Makes Financial Sense

Buying typically makes sense when:

  • Long-term stability: You plan to stay in the area for at least 5-7 years
  • Financial readiness: You have a stable income, good credit score (ideally 620+), and an emergency fund
  • Building equity: Home prices are appreciating in your market
  • Tax benefits: You can take advantage of mortgage interest deductions
  • Fixed housing costs: You prefer predictable monthly payments with a fixed-rate mortgage

When Renting Makes More Financial Sense

Renting may be the better choice when:

  • Flexibility needed: Your career or life situation may require relocation
  • High housing costs: The local market has inflated home prices or high property taxes
  • Investment opportunities: You can earn better returns investing the difference in the stock market
  • Credit building: You're working on improving your credit score or saving for a larger down payment
  • No maintenance burden: You prefer your landlord handle repairs and upkeep

Next Steps After Using the Calculator

Once you've compared renting vs buying, consider these next steps:

  • Check your credit score: A higher score means better mortgage rates and lower monthly payments
  • Get pre-approved: Know exactly how much you can borrow before house hunting
  • Compare mortgage rates: Shop around from multiple lenders for the best terms
  • Calculate true affordability: Include all costs beyond just the mortgage payment

Ready to take the next step? Use the resources above to check your credit score or compare mortgage rates from top lenders.

Important Disclaimer

This calculator provides general estimates for comparison purposes only. Default values and assumptions may be outdated or may not reflect your specific situation. Actual costs, returns, and outcomes will vary based on numerous factors including but not limited to: local market conditions, individual financial circumstances, tax laws, interest rate changes, and property-specific details.

This tool does not constitute financial, tax, legal, or investment advice. For personalized guidance on your specific situation, including tax savings calculations and deduction eligibility, please consult with qualified professionals such as a financial advisor, tax specialist, accountant, or real estate attorney.

Past performance and historical averages do not guarantee future results.