Rent vs Buy Calculator
Compare the total cost of renting against buying over a holding period.
Please note: Estimates only, not investment or legal advice. Property markets, taxes, fees and lending rules vary by location and change over time. Verify figures with a qualified professional before committing.
What the Rent vs Buy Calculator does
The honest rent-versus-buy comparison assumes the renter invests both the down payment and any monthly saving. Buying builds equity and fixes the housing cost, while renting keeps capital liquid and invested. Transaction costs mean short holding periods almost always favour renting.
Formula
Owner's position = Equity after selling costs − Down payment − Mortgage paid − Ownership costsRenter's position = Investment portfolio − Down payment − Total rent paidBreak-even = The first year the owner position exceeds the renter position
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Property price | selected currency | Yes | Accepts 0 or more. |
| Down payment | selected currency | Yes | Accepts 0 or more. |
| Mortgage interest rate | % | Yes | — |
| Loan term | years | Yes | Accepts 1 or more. |
| Current monthly rent | selected currency | Yes | Accepts 0 or more. |
| Annual rent increase | % | Yes | — |
| Annual property appreciation | % | Yes | — |
| Annual ownership costs | selected currency | Optional | Property tax, insurance, maintenance, service charges. Accepts 0 or more. |
| Return on invested savings | % | Yes | What the down payment would earn if invested instead. |
| Years to compare | number | Yes | Accepts 1 or more, up to 50. |
| Selling costs | % | Optional | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Property price, Down payment, Mortgage interest rate and Loan term and 5 more.
- Optionally add Annual ownership costs and Selling costs.
- Select Calculate.
Worked example
A $400,000 property, $80,000 down at 6.5%, versus $2,000 rent rising 3%, 3% appreciation, 6% investment return, 7 years.
- Price
- 400000
- Down
- 80000
- Rent
- 2000
- Appreciation
- 3
- Return
- 6
- Years
- 7
Buying typically breaks even around year 5–6 under these assumptions, though the outcome swings heavily with appreciation.
Frequently asked questions
Why does renting win over short periods?
Purchase and selling costs together often reach 8–10% of the price. Appreciation needs several years to cover that before ownership pulls ahead.
Is buying always better long term?
Usually, but not always. In markets with high prices relative to rents, an invested down payment can outperform property for a very long time.