Rent vs Buy Calculator
A serious rent-versus-buy comparison: transaction costs, maintenance, home-price growth, and the investment return on money you don't put into a house.
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Break-even point
Beyond 8 years
Buying does not overtake renting within the 8-year horizon under these assumptions.
- Net advantage of renting
- $81,550
- Buyer net position at horizon
- $244,293
- Renter net position at horizon
- $325,842
- Estimated property value
- $633,385
- Remaining mortgage
- $351,089
- Selling costs
- $38,003
- Renter investment value
- $325,842
- Total rent paid
- $213,416
- Total buying outlays
- $440,693
Assumes the renter invests the deposit, closing costs, and any month where owning costs more.
Renting produces an estimated net advantage of $81,550 after 8 years under these assumptions.
First-year monthly costs: renting about $2,000 versus owning about $3,357 (mortgage $2,398 plus running costs).
Small changes in home-price growth, rent inflation, investment return and maintenance costs can materially change this result.
These estimates are for general planning only and are not mortgage approval, lending, tax, legal or financial advice. Actual rates, fees, taxes, insurance costs and lender decisions may differ. Financial results do not capture every lifestyle, mobility, maintenance or housing-quality consideration.
What it actually costs you per month
Total cash paid out, minus what you get back when you sell, spread across the months you lived there. The renting column charges the return the deposit and closing costs would have earned instead.
| If you stay | Buying | Renting |
|---|---|---|
| 1 year | $5,106/mo | $1,450/mo |
| 3 years | $2,846/mo | $1,477/mo |
| 5 years | $2,362/mo | $1,504/mo |
| 8 years | $2,046/mo | $1,543/mo |
Owning looks expensive over short stays because purchase and selling costs are spread over few months. The longer you stay, the further they spread.
Sensitivity: how assumptions move the result
| Assumption | Lower | Your input | Higher |
|---|---|---|---|
| Home-price growth | 2%$126,252 rent | 3%$81,550 rent | 4%$33,704 rent |
| Investment return | 5%$62,584 rent | 6%$81,550 rent | 7%$101,663 rent |
| Rent increase | 2%$90,126 rent | 3%$81,550 rent | 4%$72,641 rent |
| Maintenance (% of value) | 0.5%$54,002 rent | 1%$81,550 rent | 1.5%$109,097 rent |
Positive values favour buying; negative values favour renting, at your 8-year horizon.
Assumptions and conventions
- Per-period rate = nominal annual rate รท payments per year (standard quoted-rate convention).
- The renter invests the buyer's upfront cash, plus any month where owning costs more than renting, compounding monthly at the assumed return. Months where renting costs more add nothing and never draw the portfolio down.
- Rent rises annually at your rate. Ownership running costs โ property tax, insurance, service charges and maintenance โ rise with inflation from year one; maintenance is budgeted as a share of the original purchase price, not the appreciated value.
- The buyer's position is home value minus selling costs and the remaining mortgage; the renter's includes the returned deposit.
- No tax deductions, credits or country-specific subsidies are modelled in this release.
- Values are calculated at full precision and rounded for display; columns may differ from totals by a small rounding amount.
How the comparison works
The model simulates both paths month by month over your chosen horizon. The buyer pays the mortgage plus ownership costs (tax, insurance, service charges, and maintenance as a share of the home's value), while the home appreciates at your assumed rate. The renter pays rent (rising annually) โ and, crucially, invests the cash the buyer tied up: the down payment, closing costs and renovation, plus every month's difference in outgoings, compounding at your assumed investment return.
At the horizon, the buyer's position is the home's value minus selling costs and the remaining mortgage; the renter's position is the investment account plus the returned rental deposit. The comparison is between those two net positions โ not between rent and a mortgage payment, which ignores equity, growth and opportunity cost entirely.
Why the horizon dominates
Buying front-loads large one-time costs (closing and later selling costs) that only appreciation and principal repayment can claw back. Over short horizons those costs usually make renting favourable; over long horizons ownership usually catches up. The break-even year the calculator reports is where the two paths cross under your assumptions โ and small changes in growth or return assumptions move it materially, which is why a sensitivity table is included.
Formula
Buyer position(t) = home value(t) ร (1 โ selling cost %) โ mortgage balance(t), with home value(t) = price ร (1 + growth)แต and the balance from a standard amortisation schedule.
Renter position(t) = investment account(t) + refundable deposit, where the account starts at (buyer upfront cash โ renter deposit โ moving costs) and each month grows at the monthly-compounded investment return, plus that month's (buyer outgoings โ renter outgoings) โ negative when renting costs more.
Buy advantage(t) = buyer position โ renter position; the break-even year is the first year-end where it is at least zero. Tax effects are excluded: no country tax rules are configured in this release.
Assumptions
- Rent rises once a year at the rate you set; ownership running costs rise with general inflation; maintenance is a constant percentage of the home's current value.
- The renter invests the buyer's upfront cash and any monthly cost difference at the assumed return, compounding monthly. Investment taxes are not modelled.
- Home-price growth is a smooth annual rate โ real markets are lumpier in both directions.
- Selling costs are a percentage of the final home value; the mortgage is a fixed-rate monthly repayment loan.
- No tax deductions, credits or country-specific subsidies are included.
- Financial results do not capture every lifestyle, mobility, maintenance or housing-quality consideration.
Content and formulas reviewed on 2026-08-06. See our methodology for how calculations are built and tested.
Worked example
Rent of 2,000 a month (rising 3% a year) versus buying a 500,000 home with 100,000 down at 6% over 30 years, 10,000 buying costs, 6% selling costs, 6,000 tax and 1,800 insurance a year, 1% maintenance, 4% home growth, 6% investment return, over 10 years.
The buyer ends with roughly the home's grown value (โ740,000) minus โ44,000 selling costs and the โ335,000 remaining balance. The renter ends with the invested 110,000 upfront plus monthly differences, compounded at 6%. The calculator reports both positions, the net advantage, the break-even year, and how one-point changes in each assumption move the answer.
Frequently asked questions
Does this include home appreciation?
Yes โ the home's value grows at the annual rate you set (negative rates are allowed), and the buyer's final position is based on that grown value net of selling costs and the remaining mortgage.
What return is assumed on invested savings?
Whatever you enter. The renter's account compounds monthly at that annual rate. Using a realistic after-tax figure for how you would actually invest โ not a best-case market return โ keeps the comparison honest.
Why do selling costs matter so much?
They are typically several percent of the property's value and are paid on the full value, not just your equity. Over short horizons they can exceed all the appreciation, which is a major reason buying rarely wins over one or two years.
Is renting always wasting money?
No. Rent buys housing, just as interest, taxes, insurance, maintenance and transaction costs do for an owner โ none of that builds equity either. Whether buying ends up ahead depends on prices, rates, rents, returns and how long you stay; this model shows the trade-off rather than assuming an answer.
How long do I need to stay for buying to break even?
The calculator reports the break-even year for your inputs. Small changes in home-price growth, rent inflation, investment return and maintenance costs can materially change this result โ check the sensitivity table before drawing conclusions.
These estimates are for general information only and are not financial, tax, legal, or investment advice. Rates, fees, and lending rules vary by lender and country. Actual costs and outcomes may differ from the projections shown.