Rent vs Buy Calculator
Enter your rent, home price, and financial assumptions. The calculator simulates both paths year by year — tracking the buyer's growing equity against the renter's invested down payment — and tells you which leaves you wealthier at your chosen horizon, and in which year (if any) the buyer pulls ahead.
Buying
Renting & assumptions
After 10 years
Renting comes out ahead by $12,933
Buying does not overtake renting within your horizon.
Buyer net position
$-129,426.81
Renter net position
$-116,493.78
Net position over time
Year-by-year breakdown
| Year | Buyer net | Renter net |
|---|---|---|
| 1 | $-43,342.85 | $62,925.00 |
| 2 | $-54,788.16 | $44,903.25 |
| 3 | $-65,816.25 | $26,425.37 |
| 4 | $-76,406.32 | $7,481.91 |
| 5 | $-86,536.43 | $-11,936.67 |
| 6 | $-96,183.35 | $-31,839.95 |
| 7 | $-105,322.56 | $-52,237.60 |
| 8 | $-113,928.10 | $-73,139.30 |
| 9 | $-121,972.52 | $-94,554.77 |
| 10 | $-129,426.81 | $-116,493.78 |
How it works
Rather than comparing monthly cash flows, this calculator compares net wealth. Each year the buyer's position is: home value after a hypothetical sale (net of selling costs and outstanding mortgage) minus every dollar spent — down payment, closing costs, mortgage payments, and maintenance. The renter's position is: the invested lump sum (what the buyer paid upfront, compounding at your chosen investment return) minus all cumulative rent paid. This symmetry means neither side gets a free lunch: the buyer's equity is offset by outlay, and the renter's portfolio is offset by rent.
The renter is assumed to invest exactly what the buyer sank upfront — the down payment plus closing costs — at a constant annual return you specify. This is the only way to make a fair comparison: if the renter simply spent that money, buying would always win simply because the renter has nothing to show for it. In reality, the appropriate investment return depends on your risk tolerance and the available alternatives, which is why the tool lets you adjust it.
The break-even year is the first year in which the buyer's net position is at least as strong as the renter's. Before that year, renting (by the wealth metric) is ahead; after it, buying is. This crossover can shift dramatically with assumptions: a higher appreciation rate pulls it earlier; a higher investment return or rent increase pushes it in opposite directions. The year-by-year table lets you see the full trajectory rather than just the end point.
Frequently asked questions
Is renting always throwing money away?+
No. Rent buys shelter, flexibility, and the freedom from repair bills — the same things a mortgage payment buys, but without the equity accumulation. The buyer also 'throws money away' on mortgage interest, property taxes, maintenance, and opportunity cost on the down payment. Whether owning or renting comes out ahead depends on local prices, your time horizon, and what you do with the capital you don't tie up in a house. This calculator makes those trade-offs explicit rather than assuming one side wins by default.
What home appreciation rate is realistic?+
Long-run nominal house price growth in the United States has historically averaged roughly 3–4% per year — close to general inflation — though this varies enormously by city and decade. Some markets have compounded at 6–8% over certain periods; others have been flat or declined in real terms. No tool can predict your local market. The calculator defaults to 3%, which is a commonly cited long-run national average, but you should stress-test the result with lower figures (1–2%) to see whether the conclusion changes. This is not financial advice.
What does this calculator leave out?+
Several important factors: (1) Tax — mortgage interest deductions and capital-gains exclusions on primary residences can meaningfully favour buying in some jurisdictions; property taxes add ongoing cost not captured here. (2) HOA fees and insurance, which vary widely. (3) The value of flexibility — renters can relocate quickly; owners cannot. (4) Forced savings — many people find it easier to build equity via mortgage payments than to invest consistently. (5) Emotional value of ownership. These are real considerations that no spreadsheet captures fully. Consult a qualified financial adviser before making a decision of this magnitude.