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Rent vs Buy
Compare net wealth from buying vs renting over your planned stay.
If you buy
Enter the home price, loan terms, and ongoing ownership costs.
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If you rent
Model rent growth and what a renter could earn by investing the down payment plus any monthly savings vs buying.
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Comparison horizon
How long you plan to stay before comparing net wealth.
Years in home
10-Year Rent vs Buy
Compare projected net wealth: home equity after selling costs vs a renter's invested savings (down payment, closing costs, and monthly buy/rent difference).
Projected net wealth after 10 years
Buy
$320,949
Rent
$309,053
Difference
$11,896
Buying produces $11,896 more projected net wealth after 10 years under these assumptions.
- Year 1 all-in ownership costs $1,031.69/mo more than rent — but equity and appreciation may offset that over time.
Net Wealth ComparisonBuy $320,949 · Rent $309,053
| Buy | Rent | |
|---|---|---|
| Net wealth at year 10 | $320,949 | $309,053 |
| Year 1 monthly cost | $3,231.69 | $2,200.00 |
| Upfront cash | $101,250 | $101,250 (invested) |
| Total housing paid | $514,581 | $302,646 |
| Ending asset | $320,949 after selling | $309,053 portfolio |
| Home value at horizon | $666,110 | — |
| Loan balance at horizon | $305,194 | — |
Wealth Over Time
| Year | Buy (net wealth) | Rent (portfolio) | Difference |
|---|---|---|---|
| 1 | $82,508 | $119,186 | $36,677 |
| 2 | $104,341 | $137,686 | $33,345 |
| 3 | $127,163 | $156,775 | $29,612 |
| 4 | $151,021 | $176,475 | $25,454 |
| 5 | $175,965 | $196,812 | $20,847 |
| 6 | $202,048 | $217,814 | $15,766 |
| 7 | $229,324 | $239,509 | $10,185 |
| 8 | $257,852 | $261,926 | $4,074 |
| 9 | $287,691 | $285,096 | $2,595 |
| 10 | $318,906 | $309,053 | $9,853 |
Your Rent vs Buy Analysis
Derived from the assumptions and calculation results above. Estimates only — not a recommendation to buy or rent.
Comparison summary
Over 10 years under these assumptions:
Buying projected net wealth$320,949
Renting projected net wealth$309,053
Projected difference$11,896
Buying produces $11,896 more projected net wealth after 10 years under these assumptions.
This result depends on assumptions such as home appreciation, rent growth, investment returns, mortgage rate, ownership costs, and how long you stay.
Year 1 monthly cost
Buy — year 1
- Principal & interest
- $2,275.44/mo
- Property tax
- $450.00/mo
- Home insurance
- $131.25/mo
- Maintenance
- $375.00/mo
Total $3,231.69/mo
Rent — year 1
- Rent
- $2,200.00/mo
Total $2,200.00/mo
Where the money goes
Buying path
- Mortgage principal & interest over the horizon
- Property taxes, insurance, maintenance, and HOA while owning
- Upfront down payment and closing costs
- Selling costs at the horizon (6.00% of projected home value)
- Home appreciation builds equity before selling costs
Renting path
- Rent payments with 3.00% annual growth
- Initial investment of $101,250 (down payment + closing costs not used to buy)
- Monthly savings invested when buying costs more than rent, compounded at 5.00%
Monthly cost alone is not the same as projected net wealth — equity, selling costs, and invested savings all affect the comparison.
Home equity at horizon
Projected home value$666,110
Remaining mortgage balance$305,194
Gross home equity$360,916
Estimated selling costs$39,967
Net wealth after selling$320,949
Gross equity is not the same as spendable net wealth until selling costs are deducted.
Investment opportunity
The renting path invests $101,250 upfront — the same down payment and closing costs a buyer would spend — then adds any monthly buy/rent difference to the portfolio when buying costs more than rent.
Projected investment balance at horizon$309,053
Total rent paid$302,646
Projected crossover
Buying overtakes renting in year 9.
Net wealth over time
Year 1
Year 5
Year 10
Text equivalent: Year 1: buy $82,508, rent $119,186; Year 2: buy $104,341, rent $137,686; Year 3: buy $127,163, rent $156,775; Year 4: buy $151,021, rent $176,475; Year 5: buy $175,965, rent $196,812; Year 6: buy $202,048, rent $217,814; Year 7: buy $229,324, rent $239,509; Year 8: buy $257,852, rent $261,926; Year 9: buy $287,691, rent $285,096; Year 10: buy $318,906, rent $309,053.
What's driving the result?
- Your 4.00% annual home appreciation assumption increases projected home equity over time.
- Your 6.50% mortgage rate affects financing cost and monthly principal & interest.
- Your 10-year comparison horizon determines how long equity and invested savings can compound.
- Your starting rent of $2,200/mo sets the baseline monthly cost for renting.
- Your 3.00% rent growth assumption increases renter housing cost over time.
- Your 5.00% investment return assumption increases the projected value of money not used for the home purchase.
- Your 1.00% maintenance assumption adds ongoing ownership cost that scales with home value.
- Your 6.00% selling cost assumption reduces net wealth when the home is sold at the horizon.
What could change this comparison?
Changing home appreciation, mortgage rate, starting rent, rent growth, investment return, length of stay, or ownership costs can change the projected outcome. Adjust the inputs above to explore different assumptions.
Assumptions used
Buy: $450,000 home; $90,000 down; 6.50% rate; 30-year term; property tax 1.20%; insurance 0.35%; no PMI (20%+ down); 1.00% maintenance; 4.00% appreciation; 2.50% closing; 6.00% selling.
Rent: $2,200.00/mo starting rent; 3.00% rent growth; 5.00% investment return.
Horizon: 10 years.
Results are estimates. Future appreciation, investment returns, taxes, insurance, and transaction costs can differ from these assumptions.
What this rent vs buy calculator compares
The buy path builds home equity through loan paydown and assumed appreciation, then subtracts selling costs at your chosen horizon. The rent path invests your down payment, closing costs, and any monthly savings when renting costs less than owning.
Results depend heavily on how long you plan to stay, local rent levels, and your assumptions for appreciation and investment returns. Use the horizon buttons above to test 5, 7, 10, and 15 years.
Break-even, costs, and opportunity cost
Break-even is the point where buying’s net wealth exceeds renting’s — often several years out because of upfront closing costs and early-year interest. Maintenance, property taxes, insurance, and PMI (when applicable) are included in the ownership side.
Rent inflation and investment return assumptions affect the renter’s portfolio growth. Transaction costs on sale reduce equity at the end of the buy path. These are simplified models — local markets, taxes, and timing can shift the outcome.
Rent vs Buy Calculator — Long-Term Wealth Comparison
Compare net wealth from renting versus buying over your planned stay. Models mortgage payments, ownership costs, appreciation, rent growth, and invested down-payment savings in a simplified framework.
Common questions
- How does a rent vs buy calculator work?
- Enter buy-side details (price, loan, ownership costs) and rent-side details (monthly rent, rent growth, investment return). The calculator compares net wealth at your chosen stay length — equity after selling costs vs a renter’s invested savings.
- Is renting or buying cheaper?
- It depends on stay length, rent level, rates, appreciation, and transaction costs. Short stays often favor renting because of closing and selling costs. Longer stays may favor buying when equity growth and paydown outweigh those costs — run your numbers above.
- How long should I plan to stay when comparing rent vs buy?
- Transaction costs mean short stays often favor renting. Many analyses use five or more years as a breakpoint, but your local market, rent level, and tax situation matter — adjust the comparison horizon and re-run.
- What costs does the buy side include?
- Mortgage principal and interest, property taxes, insurance, PMI when down payment is under 20%, HOA, maintenance, closing costs at purchase, and selling costs at the horizon. Appreciation affects final home value.
Learn
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