Rent vs Buy Calculator
Compare the financial outcomes of renting vs buying a home. See which builds more wealth over your intended stay — factoring mortgage costs, tax deductions, home appreciation, rent increases, and investment returns on your savings.
$80,000 down payment
State avg: 1.60%
Assumptions
Buying — Net Worth
$266,283Home value minus remaining mortgage
Renting — Invested Savings
$6,258,311Down payment + monthly savings invested
After 10 years, renting saves $5,992,028 compared to buying. The invested down payment + lower monthly costs grow faster than home equity in this scenario.
| Year | Buy Net Worth | Rent Net Worth | Home Value | Mortgage Left | Investments |
|---|---|---|---|---|---|
| 1 | $95,577 | $533,498 | $412,000 | $316,423 | $533,498 |
| 2 | $111,753 | $1.0M | $424,360 | $312,607 | $1.0M |
| 3 | $128,556 | $1.5M | $437,091 | $308,535 | $1.5M |
| 4 | $146,013 | $2.1M | $450,204 | $304,191 | $2.1M |
| 5 | $164,155 | $2.6M | $463,710 | $299,555 | $2.6M |
| 6 | $183,012 | $3.3M | $477,621 | $294,609 | $3.3M |
| 7 | $202,618 | $3.9M | $491,950 | $289,332 | $3.9M |
| 8 | $223,007 | $4.7M | $506,708 | $283,701 | $4.7M |
| 9 | $244,216 | $5.4M | $521,909 | $277,694 | $5.4M |
| 10 | $266,283 | $6.3M | $537,567 | $271,284 | $6.3M |
| Input | Value |
|---|---|
| Home Price | $400,000 |
| Monthly P&I | $2,023 |
| Down Payment + Closing | $92,000 |
| Monthly Rent | $2,000 |
| Home Appreciation | 3%/yr |
| Rent Increase | 3%/yr |
| Investment Return | 7%/yr |
| Years Staying | 10 years |
This model compares net worth outcomes under both scenarios. It does not account for one-time home repairs, HOA fees, PMI, moving costs, or the psychological value of homeownership. Actual results depend on local market conditions.
Edit inputs ↑Frequently asked questions
Is it better to rent or buy a home?
It depends on how long you plan to stay, local home prices vs rents, and your financial assumptions. Generally, buying becomes more advantageous the longer you stay (typically 5+ years), as the upfront closing costs are amortized over time and home appreciation + mortgage paydown build equity.
What costs are included in the rent vs buy calculator?
Buying: down payment, closing costs (typically 2-5%), monthly P&I, property tax, home insurance, maintenance (1%/yr default), minus tax deductions for mortgage interest and property tax. Renting: monthly rent, renters insurance, plus investment returns on the money you would have spent on the down payment and closing costs.
How does the mortgage interest tax deduction affect rent vs buy?
If you itemize deductions, mortgage interest on up to $750,000 of debt and property taxes (subject to the SALT cap) reduce your taxable income. The calculator estimates the tax savings based on your marginal tax rate, which reduces the effective cost of homeownership.
What is the breakeven point for buying vs renting?
The breakeven year is when the net worth from buying (home equity) exceeds the net worth from renting (invested savings). This typically ranges from 3-7 years depending on home appreciation, rent increases, and mortgage rates.