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Free rent vs buy calculator

Adds up mortgage, taxes, insurance, HOA, maintenance, and down-payment opportunity cost, then compares to cumulative rent to show which option costs less over your planned time.

About this calculator

How to use

  1. Enter the home price, down payment, mortgage rate, and loan term.
  2. Add annual property tax rate, home insurance cost, maintenance rate, and HOA fees.
  3. Enter your current monthly rent and how fast you expect rent to rise per year.
  4. Set home appreciation rate, expected investment return on your down payment, and how many years you plan to stay.
  5. Click Compare rent vs buy to see total costs, monthly costs, and break-even year.

The formula

Total cost to buy (over N years) = mortgage payments + property taxes + insurance + maintenance + HOA − equity gained − home appreciation + opportunity cost of down payment

Total cost to rent (over N years) = sum of annual rent payments (growing at rent increase rate)

Break-even year = the first year when (total buy cost − equity gain) < total rent paid

Worked example

$400,000 home, $80,000 down (20%), 7% mortgage, 30-year term, 1.2% property tax, $2,400/yr insurance, 1% maintenance, no HOA, $2,000/mo rent, 3% rent growth, 3% appreciation, 7% investment return.

  • Monthly cost to buy ≈ $3,062 (P&I + tax + insurance + maintenance)
  • Monthly rent (year 1): $2,000
  • Over 7 years, renting is often cheaper because the monthly cost gap and opportunity cost on $80,000 outweigh the equity built in early years.
  • Over 20+ years with steady rent increases, buying typically wins.

Notes

  • All figures are nominal (not inflation-adjusted). Inflation reduces the real value of future mortgage payments but also reduces the real value of rent savings.
  • The calculator does not include selling costs (agent fees, closing costs, capital gains) which typically run 6–8% of the sale price.
  • Local markets vary widely. Check recent appreciation data for your area rather than relying on the default 3%.

Frequently asked

How does the calculator decide which is cheaper?
It sums all nominal costs of buying (mortgage payments, property tax, insurance, HOA, and maintenance) then subtracts the equity and appreciation you gain. For renting, it sums all rent payments as they grow each year. Whichever total is lower wins.
What is opportunity cost of the down payment?
If you buy, your down payment is locked in your home. If you rent, that money stays invested. The calculator adds the potential growth of that invested sum to the cost of buying, making it an apples-to-apples comparison.
Why does renting sometimes win even over long periods?
High opportunity costs, low appreciation, or high maintenance rates can make buying expensive even over 20+ years. The result depends heavily on your local market: use your own numbers for the most accurate answer.
Does the calculator account for selling costs?
No. Agent commissions, closing costs when selling, and capital gains tax are not included. In practice, selling costs of 6–8% of the home price would make renting more competitive, especially for short holds.
What is the break-even year?
The break-even year is when buying becomes cheaper on a cumulative basis: the year when total buying costs (minus equity gains) first fall below total rent paid.

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