Rent vs Buy Calculator

Compare the full cost of renting with buying over the years you plan to stay — including equity, appreciation and what your down payment could earn elsewhere.

Quick answer

A rent vs buy calculator compares the total cost of renting with the net cost of owning over the years you plan to stay. Buying's cost includes payments, taxes, upkeep and the lost return on your down payment, minus the equity you keep. Buying usually wins over longer stays.

$
%
$
%
%
yrs
yrs
%
%
%
%
Buying saves
$29,395
Net cost of renting
$202,289
Net cost of buying
$172,894
Mortgage payment (P&I)
$2,076
Home equity at end
$201,430
Over 7 years, renting costs about $202,289 in total. Buying costs $172,894 once you count payments, taxes, upkeep and the investment return your down payment could have earned — and subtract the $201,430 of equity you keep. Buying comes out ahead by $29,395. The longer you stay, the more buying tends to win.

Key takeaways

  • Equity and appreciation offset the cost of buying.
  • The down payment has an opportunity cost.
  • Short stays favour renting because of up-front costs.
Opportunity cost — The return you give up by using money one way, such as a down payment, instead of investing it.

How the rent vs buy calculator works

Renting's cost is simply the rent you pay. Buying's net cost is everything you pay out, plus the return your down payment would have earned invested, minus the equity you own when you leave. We ignore tax deductions and selling costs for simplicity.

Formula

Rent cost = Σ rent × 12 × (1 + rent increase)^year Buy cost = down + mortgage payments + tax & upkeep + lost investment return on down − (home value − loan balance)

Standard formula. Further reading: CFPB – Buying a house

Worked example

With $2,000/month rent and no increases, one year of renting costs $24,000. Buying at 0% interest with no other costs would have a net cost of zero, because every payment becomes equity.

Change any number above and the plain-English explanation updates instantly with your own figures.

Frequently asked questions

How long do I need to stay for buying to make sense?

Often 5+ years, because equity builds slowly at first and buying has large up-front costs.

Does this include closing and selling costs?

No. Closing (2–5%) and selling costs (often 5–6%) make buying less attractive over short horizons.

What is opportunity cost?

The return your down payment could have earned if invested instead of tied up in the house.

Is renting throwing money away?

No — rent buys housing and flexibility. Mortgage interest, taxes and maintenance are also unrecoverable costs.

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Results are estimates for educational purposes and are not financial advice.

Written and reviewed by Muhammad Asif, founder of CalcPane · Formulas verified by automated tests · Updated