Rent Vs Buy Calculator
Rent versus buy is not a comparison of rent with a mortgage payment. Owning costs the down payment, the loan, taxes, insurance and maintenance, but it returns the equity and any appreciation at sale.
Net cost to own
$148,899.29
- Total cost of renting
- $183,899.09
- Home value at sale
- $491,949.55
- Loan balance at sale
- $289,331.98
- Owning advantage
- $34,999.80
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Net cost to own = down payment + payments + tax + maintenance + insurance - sale proceeds
- down
- Cash paid at purchase
- payments
- Total mortgage payments made
- proceeds
- Sale price minus selling costs and the remaining loan
- rent
- Total rent paid over the same years
How to check the result by hand
- 1
Add up the cost of owning
Total the down payment, the mortgage payments over the years, property tax, maintenance and insurance. These are the outflows of ownership.
- 2
Estimate the sale proceeds
Grow the home price by the appreciation rate, subtract selling costs, and subtract the remaining loan balance. This is the cash returned at sale.
- 3
Net the two for the cost of owning
Subtract the sale proceeds from the total outflows. A large positive number means owning was expensive; a small or negative one means it was cheap.
- 4
Total the rent over the same years
Compound the monthly rent by the annual increase and sum it across the years. This is the true cost of renting, not twelve months times the years.
- 5
Compare and check the horizon
The lower net cost wins. Re-run at different horizons to find the break-even, the number of years you must stay for buying to come out ahead.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Rent Vs Buy page.