Rent vs Buy Calculator
Compare renting vs buying using scenario assumptions for rent growth, home appreciation, costs, and investment return. Educational use only. Not financial advice.
Inputs
$90,000.00 of price
Quick scenarios
This is a simplified scenario model and does not include income taxes or itemized deductions. It assumes leftover monthly cash is invested at the rate shown.
Results
Break-even (year)
N/A
First year buying >= renting (net worth)
Break-even (month)
N/A
First month buying >= renting
Net worth (rent) at 10 yr
$251,869.50
Net worth (buy) at 10 yr
$249,782.57
Difference at horizon
-$2,086.93
Buy - rent
Winner at horizon
Rent
Cash to close (est.)
$103,500.00
Down payment + closing costs
Initial owner cost (mo.)
$3,275.19
Year 1 monthly cash cost
Year-by-year (first 12 years)
| Year | Rent net worth | Buy net worth | Rent/mo | Own/mo |
|---|---|---|---|---|
| 1 | $117,556.32 | $66,213.81 | $2,678.00 | $3,275.19 |
| 2 | $131,812.20 | $83,577.81 | $2,758.34 | $3,300.69 |
| 3 | $146,259.94 | $101,621.45 | $2,841.09 | $3,326.94 |
| 4 | $160,890.73 | $120,375.77 | $2,926.32 | $3,353.99 |
| 5 | $175,694.65 | $139,873.41 | $3,014.11 | $3,381.85 |
| 6 | $190,660.47 | $160,148.80 | $3,104.54 | $3,410.54 |
| 7 | $205,775.66 | $181,238.16 | $3,197.67 | $3,440.09 |
| 8 | $221,026.21 | $203,179.71 | $3,293.60 | $3,470.53 |
| 9 | $236,396.57 | $226,013.69 | $3,392.41 | $3,501.88 |
| 10 | $251,869.50 | $249,782.57 | $3,494.18 | $3,534.18 |
Reviewed By
Written by: Practical Finance Tools Site Owner (Site owner and product editor).
Reviewed by: Practical Finance Tools Methodology Review (Formula and assumptions review) on .
Secondary review: Practical Finance Tools Editorial Review (Editorial standards review).
Review scope: Break-even interpretation, housing-cost assumptions, and scenario-stress guidance for rent-versus-buy comparisons.
See our editorial policy and methodology.
Report corrections: admin@practicalfinancetools.com
Use this calculator for scenario comparison, not prediction
- This tool is strongest when you want to compare a small number of realistic scenarios using the same time horizon and cost assumptions.
- Break-even here is a modeled threshold under your inputs, not a forecast of home prices, rent, or investment returns.
- If small assumption changes flip the answer, treat the decision as fragile and keep comparing conservative cases.
How to interpret results
Rent vs buy results depend heavily on assumptions. Use this tool to compare scenarios, not to predict the future. Small changes in appreciation, rent growth, or mortgage rate can change the break-even horizon.
Example output (estimate)
Example inputs: $420,000 home, 6.5% mortgage rate, 7-year horizon, $2,200 rent.
| Metric | Value |
|---|---|
| Break-even (model) | Not within horizon |
| Net worth (rent) at year 7 | $202,591 |
| Net worth (buy) at year 7 | $169,156 |
Example scenarios to try
- Short horizon (2-4 years): test higher selling costs and modest appreciation.
- Long horizon (7-10+ years): test a conservative appreciation rate and higher maintenance.
- Rate sensitivity: run the same home price with a higher mortgage rate to see how quickly results change.
- Opportunity cost: increase investment return to see the effect of tying up cash in a down payment.
How to set assumptions
- Appreciation and rent growth: use conservative scenarios, then add an optimistic scenario for comparison.
- Maintenance: plan for ongoing costs and occasional large repairs.
- Selling costs: include agent fees and other costs; these often dominate short holding periods.
- Investment return: use a range; after-tax results may be different.
Sensitivity checks
- Change holding period by +/- 2 years to see break-even shifts.
- Raise the mortgage rate 1% to test payment pressure.
- Lower appreciation and raise rent growth to stress test buying.
- Compare a higher down payment vs investing the difference.
Rent vs buy calculator inputs to verify
- Use realistic local tax and insurance estimates.
- Match the loan term to what you would actually choose.
- Include expected maintenance for the property type and age.
- Check that selling costs reflect your market.
Cash assumptions to test
- Down payment size changes both loan cost and invested cash.
- Closing costs can be large in the first year; test a higher estimate.
- Renter insurance and utilities are not modeled; include them in your own budget.
Common pitfalls
- Taxes, deductions, and after-tax investment returns are not modeled here.
- Maintenance is uncertain; older homes or condos can have large one-time costs.
- Opportunity cost matters: tying up cash in a down payment can reduce investable funds.
- Holding period is critical; selling costs can dominate short time horizons.
Match your local numbers
- Use real property tax and insurance quotes for your zip code.
- Validate maintenance assumptions against recent estimates or HOA budgets.
- Confirm rent growth and appreciation with local historical ranges.
When to run a second scenario before deciding
- Run a shorter holding-period case if there is any chance you move sooner than planned.
- Run a higher-rate and higher-maintenance case if the ownership budget already feels tight.
- Run a lower-appreciation and lower-investment-return case if you want a more conservative baseline for the decision.
Related guides
Rent vs buy break-even guide Rent vs buy checklist Costs to include Rent vs buy topic hub Mortgage payoff topic hub Refinance break-even APR vs interest rate Pay off early or invest? PMI removal vs extra principal
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How we calculate
- Homeowner costs include principal & interest plus estimated tax, insurance, HOA, and maintenance.
- Home value grows based on your appreciation assumption; equity is estimated as sale proceeds minus remaining loan balance and selling costs.
- Renter "net worth" is simplified as invested upfront cash (down payment + closing costs) plus monthly cost differences.
FAQ
Does this include taxes or deductions?
No. This model is simplified and does not include income taxes, itemized deductions, or tax credits.
What assumptions matter most?
Holding period, mortgage rate, home appreciation, rent growth, selling costs, and investment return often drive results.
What does break-even mean here?
Break-even is the time horizon where your modeled net worth (or total cost) is similar between renting and buying under the assumptions you entered. It is not a prediction, just a scenario result.
How long do I need to stay for buying to make sense?
There is no universal number. Short time horizons can be dominated by closing and selling costs, while longer horizons may benefit from amortization and appreciation. Use the holding period input to test scenarios.
Is this an investment recommendation?
No. It's an educational scenario comparison, not advice.
Does this include PMI?
Not explicitly. If you pay PMI, you can approximate it by increasing the monthly homeowner costs (or maintenance/other costs) to reflect it.
Does it include closing and selling costs?
Yes, as percentages of home price/value based on your inputs.
Why might results differ from other calculators?
Different tools include different costs (taxes, maintenance, opportunity cost, and tax impacts) and use different modeling assumptions.
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Disclaimer
Educational use only. Not financial advice. Results are estimates based on the inputs and assumptions shown on this page. Verify details with lenders, card issuers, and professionals.
Last updated: 2026-04-04