Rent vs Buy Calculator

Renting vs Buying: What the Numbers Really Show

The rent vs buy decision is one of the most significant financial choices most people make. The true cost of homeownership goes well beyond the mortgage payment — property taxes, insurance, maintenance, and closing costs all add up. This calculator compares cumulative out-of-pocket cash outflows for both paths so you can see exactly where the break-even point falls.

When buying, your two largest upfront costs are the down payment and closing costs. Closing costs typically run 2–5% of the purchase price and cover loan origination fees, title insurance, appraisals, and other lender fees. On the rent side, the main upfront cost is the security deposit — usually one month's rent — which is typically returned at the end of the lease. Because of the large upfront buy-side costs, renting is almost always cheaper in the short term; buying generally wins over longer time horizons as equity builds and fixed mortgage payments stay flat while rent escalates.

Note that this calculator shows cash outflows only. It does not model home price appreciation, equity build-up, or the opportunity cost of investing your down payment — all of which significantly affect the true financial comparison. Use this as a starting point, then layer in those factors for a complete picture.

Tips for a More Accurate Comparison

• Use realistic maintenance figures. Most financial planners recommend budgeting 1–2% of home value per year for maintenance and repairs — older homes often run higher.
• Factor in your timeline. The break-even point is typically 5–10 years depending on local market conditions. If you might move in under five years, renting usually wins on total cost.
• Don't forget PMI. If your down payment is below 20%, you'll owe private mortgage insurance (roughly 0.5–1.5% of the loan per year) until you reach 20% equity. Add this to your monthly buy cost.
• Check local rent trends. The default 2% rent increase is a national historical average. In high-demand metros, 4–6% annual increases are common.
• Consider closing costs carefully. If you negotiate seller-paid concessions, your effective closing costs could be lower. Rolling costs into the loan raises your balance and monthly payment.