Rent vs Buy Calculator
Compare renting and buying over time.
Renting
Buying
Growth Rates
Total Rent Cost
--
Net Buying Cost
--
Verdict
--
Breakeven Year
--
Savings
--
| Year | Rent Cost (cum.) | Buy Cost (cum.) | Home Value | Equity |
|---|
Frequently Asked Questions
How is the breakeven year calculated? +
The breakeven year is when the cumulative cost of buying (mortgage, taxes, insurance, maintenance minus equity and appreciation) becomes less than the cumulative cost of renting (rent payments minus investment returns on what you would have spent on a down payment).
What does the investment return rate represent? +
If you rent instead of buying, your down payment money stays invested. This rate models the annual return on those invested savings. A typical assumption is 7% for stock market returns.
Does this account for rent increases? +
Yes. Rent is assumed to increase at the same rate as home appreciation, which is a common modeling approach. You can adjust the appreciation rate to reflect your local market.
What costs are included in the buying calculation? +
The buying side includes mortgage principal and interest, property taxes, homeowners insurance, and maintenance costs. It credits you with home equity buildup and price appreciation.