Buy or Rent a Home Calculator

Compare the financial implications of buying versus renting a home

Buying

Renting

Comparison

Home Price

Down Payment

Loan Term

Interest Rate

Annual Property Tax

Annual Home Insurance

Monthly HOA Fees

Annual Maintenance ⓘ Typically 1-2% of home value annually for repairs and maintenance

Monthly Rent

Renter's Insurance

Years Renting

Annual Rent Increase (%) ⓘ Average rent increases 3-5% per year in most markets

Expected Investment Return

Comparison Period

Home Appreciation (%) ⓘ Historical average is about 3-5% annually

Inflation Rate (%) ⓘ Affects future value calculations

A Buy or Rent a Home Calculator is a powerful financial tool that helps you determine whether it's more cost-effective to purchase a home or continue renting based on your personal circumstances, local market conditions, and long-term financial goals.

How a Buy vs. Rent Calculator Works

This calculator compares the total costs of buying versus renting over time by analyzing:

1. Upfront costs (down payment, closing costs)

2. Monthly expenses (mortgage vs. rent payments)

3. Long-term financial impacts (equity growth, investment opportunities)

4. Market factors (home appreciation, rent inflation)

Key Inputs Required

Buying Costs

• Home purchase price

• Down payment percentage

• Mortgage interest rate

• Loan term (15/30 years)

• Property taxes (annual)

• Homeowners insurance

• Maintenance costs (typically 1-2% of home value/year)

• Closing costs (2-5% of purchase price)

• Expected home appreciation rate

Renting Costs

• Monthly rent payment

• Annual rent increase rate

• Renter's insurance

• Security deposit

Financial Factors

• Your marginal tax rate (for mortgage interest deduction)

• Alternative investment returns (if investing savings instead of buying)

• Length of time you plan to stay in the home

• Opportunity cost of down payment

Outputs Provided

1. Cost comparison timeline (break-even point when buying becomes better)

2. Total net costs of each option over your time horizon

3. Equity accumulation if buying

4. Potential investment growth if renting and investing the difference

5. Interactive charts showing year-by-year comparisons

When to Use This Calculator

• When relocating to a new city

• During life transitions (marriage, growing family)

• When considering job changes that might require moving

• When evaluating long-term wealth-building strategies

• When market conditions change (rising/falling prices/rates)

Example Scenario

Buying:

• $400,000 home

• 20% down payment ($80,000)

• 6.5% 30-year fixed mortgage

• 1.2% property taxes

• $1,200/year insurance

• 3% annual home appreciation

Renting:

• $2,200/month rent

• 4% annual rent increase

• $200/year renter's insurance

Results:

• Break-even point: 5.2 years

• After 10 years: Buying is $48,000 better financially

• After 5 years: Renting is $12,000 cheaper

Limitations to Consider

1. Market unpredictability - Appreciation rates and rent increases are estimates

2. Personal factors - Job stability, family plans, lifestyle preferences

3. Emotional aspects - Homeownership pride vs. renting flexibility

4. Hidden costs - Major repairs, HOA fees, special assessments