Rent vs Buy Home Affordability Calculator
Compare the long-term financial cost of renting versus buying a home, accounting for your mortgage, taxes, insurance, maintenance, home appreciation, and investment returns.
Rent vs Buy Formula
This calculator projects the total cost of buying and the total cost of renting over your chosen time horizon, then compares the net financial position of each option after accounting for home equity, selling costs, and investment growth on money not spent on a down payment.
This model assumes that any money not spent on a down payment, closing costs, or higher monthly ownership costs is invested and grows at your chosen investment return rate. It does not account for taxes on investment gains, mortgage interest tax deductions, or one-time moving costs, and is intended for educational comparison rather than a precise financial projection.
How to Use the Rent vs Buy Calculator
Enter the home purchase details
Add the home price, down payment percentage, mortgage rate, loan term, and one-time closing costs.
Enter ongoing ownership costs
Add your estimated property tax rate, annual homeowners insurance, and maintenance costs as a percentage of home value.
Enter your renting details
Add your current monthly rent and how much you expect rent to increase each year.
Enter growth assumptions and time horizon
Add expected home appreciation, the return you'd expect on invested savings, and how many years you plan to compare.
Compare your results
Review the net cost of buying versus renting over your time horizon to see which option leaves you financially ahead.
Real-World Scenario Example
"A $350,000 home with a 20% down payment, a 6.5% 30-year mortgage, 1.1% property tax, $1,500/year insurance, 1% maintenance, compared against $2,200/month rent rising 3% per year, with 3.5% home appreciation and a 6% investment return over a 7-year horizon."
Inputs
Result
The monthly mortgage payment (P&I) is $1,769.79, with a total monthly ownership cost starting around $2,507.29. Over 7 years, buying has a net cost of about $132,504.97, while renting has a net cost of about $61,485.75 — making renting the better financial choice by roughly $71,019 in this scenario.
Important Disclaimer
This calculator provides estimates for educational purposes only and does not constitute financial, tax, or real estate advice. Actual costs, tax treatment, home values, and investment returns will vary. Consult a qualified financial advisor, tax professional, or real estate professional before making a decision to rent or buy.
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