Rent vs. Buy Calculator
Enter your rent, the home you're considering, and your financing — the net-worth comparison updates as you type, and the link always carries your numbers.
How this calculator works
Buying side: the home's value grows at your appreciation rate; the mortgage balance shrinks according to standard amortization; equity is home value minus the remaining balance. Renting side: your down payment, instead of going into a house, is invested and grows at your chosen return — its future value minus every dollar of rent paid over the same period (rent increasing annually) is the renting "net worth." Comparing these two figures after N years shows which path leaves you with more — not just which one has the lower monthly bill. This is a simplified model (see the FAQ for what it leaves out).
Worked example
At the defaults — $1,800/month rent rising 3% annually, a $350,000 home with 20% down ($70,000) at 6.5% over 30 years, 2.5%/year in tax, insurance, and maintenance, 3% annual appreciation, and a 6% investment return — after 7 years: the home is worth about $430,456, the mortgage balance has fallen to about $253,165, leaving $177,290 in home equity. Renting instead: the $70,000 down payment invested at 6% grows to about $105,254, but total rent paid over 7 years comes to about $165,509 — leaving a renting "net worth" of −$60,255 (rent was the larger number). Buying finishes about $237,545 ahead in this scenario.
Frequently asked questions
What does this simplified model leave out?
Real costs it doesn't include: closing costs on the purchase (typically 2–5% of price), selling costs like realtor commissions if you eventually sell (often 5–6%), any mortgage-interest tax deduction, moving costs, and renovation or repair surprises on the buying side. It also assumes rent and ownership costs are otherwise comparable (same size, same location). Treat the result as a starting point, not a complete financial plan.
Why compare net worth instead of just saying which is "cheaper"?
Because rent vs. buy isn't really about the smaller monthly payment — it's about what you end up owning. Renting can have a lower monthly cost while buying builds equity in an appreciating asset; comparing net worth after N years captures both effects instead of only the cash that leaves your account each month.
Does a longer time horizon usually favor buying?
Often, yes — amortization means more of each payment goes to principal (not interest) over time, and appreciation compounds for longer, both of which help the buying side. But it genuinely depends on your inputs: a high mortgage rate, low appreciation, or a strong investment return on the renting side can flip the result even over a long horizon. Try extending the "years to compare" field and watch the gap change.
What if home prices don't rise?
Set the appreciation field to 0% and see for yourself. With this calculator's other defaults, buying still comes out ahead at 0% appreciation (equity still builds through mortgage paydown), but the gap narrows substantially. Explore a range of appreciation assumptions rather than trusting a single guess — nobody can predict home prices with certainty.