Rent vs Buy Calculator
Renting and buying are two different cost structures, so comparing a rent cheque with a mortgage payment is misleading. This page prices both sides from your numbers: what each costs in the first month, and what each costs across the years you expect to stay.
Only money you cannot get back is counted. The principal half of your payment and the down payment itself build equity rather than being spent, so they stay out. Interest, upkeep, property tax and the return your cash could earn elsewhere stay in, and price appreciation is netted off the buy side.
Results update as you type.
Using this rent vs buy calculator
Renting and buying are two different cost structures, so comparing a rent cheque with a mortgage payment misleads. This page prices both sides from your numbers: what each costs in the first month, and what each costs across the years you expect to stay.
Only money you cannot get back is counted. The principal half of your payment and the down payment itself build equity rather than being spent, so they stay out. Interest, upkeep, property tax and the return your cash could earn elsewhere stay in, and price appreciation is netted off the buy side.
Filling it in
- Home price, down payment and interest rate are the buy side. The loan and the scheduled payment are worked out from them, so enter the price you are actually shopping and the rate you were quoted, not an optimistic pair.
- Loan term is the amortisation period of that purchase loan — 15, 20, 25 or 30 years. It sets how much of every payment is interest, which is the largest single line in the whole comparison.
- Current rent and rent growth are the rent side. Growth compounds every month, so it quietly decides the long-run answer: 3% a year lifts a $2,000 rent to about $2,388 after six years.
- Maintenance and property tax are charged as yearly percentages of the purchase price, with 1% and 1.1% as the working defaults. They hit the owner only, and that is where the two sides genuinely diverge.
- Investment return, price appreciation and your length of stay are the honest variables. Return is what the down payment could earn elsewhere, appreciation is what the house gains, and the stay is how long both get to compound — 7 years is the usual planning figure, and anything beyond 50 is out of range.
That is why the owning figure can come out smaller than your real cheque. On the default inputs the payment is $2,161 in principal and interest, yet the modelled first-month cost of owning is $1,900, because $1,000 a month of assumed appreciation is subtracted and the principal part counts as equity rather than cost.
Expect the answer to turn on two variables. Set appreciation to 0% and these same defaults make renting about $47,779 cheaper; plan to stay 3 years instead of 7 and buying's advantage shrinks to roughly $9,946. Closing costs, selling costs, insurance and PMI sit outside the model, and all of them push the other way.
How it works
Owning, month 1 = interest + maintenance + property tax + opportunity cost − appreciation. Interest is balance × annual rate ÷ 12; maintenance and tax are percentages of the purchase price ÷ 12; opportunity cost is your down payment × the investment return ÷ 12; appreciation is price × the appreciation rate ÷ 12.
Across your stay the loan is amortised month by month, so the interest line falls as the balance falls. Maintenance and tax stay flat on the purchase price, the opportunity cost stays flat on the down payment, rent is stepped each month by its growth rate, and appreciation compounds on the price.
Deliberately excluded: closing costs when you buy and the roughly 5–6% of the price it costs to sell, homeowners insurance, the mortgage-interest deduction, and PMI if you put down less than 20% (the PMI calculator prices that separately). Utilities and HOA dues on either side are outside it too.
Example
$400,000 price · 20% down · 6.5% rate · 25-year loan · $2,000 rent · 3% rent growth · 1% upkeep · 1.1% tax · 7% return · 3% appreciation · 7-year stay
- Loan $320,000, with a payment of $2,161 in principal and interest.
- Owning, net cost in month 1: $1,900 — interest $1,733 plus $333 upkeep, $367 tax and $467 opportunity cost, minus $1,000 of appreciation.
- Gap in month 1: −$100 in favour of buying. Across the 7-year stay: −$45,428 in favour of buying.
- Set appreciation to 0% and the same inputs flip: buying costs about $47,779 more.
- Stay only 3 years and buying's advantage falls to roughly $9,946, because interest is heaviest early and rent growth has had less time to compound.
Worked example using the figures above — an illustration, not financial advice. Your loan documents decide the real numbers.
Rent vs Buy Calculator FAQ
Is it cheaper to rent or to buy?
It depends mainly on price appreciation and how long you stay. On the defaults here — a $400,000 home against $2,000 rent with 3% appreciation — buying comes out about $45,428 cheaper across 7 years. Set appreciation to 0% and renting is about $47,779 cheaper instead.
Why is the cost of owning shown as less than my mortgage payment?
Because principal repayment and the down payment are equity, not cost. The model charges the interest, upkeep, tax and the return your cash could earn elsewhere, and nets appreciation off — which produces a smaller figure than the cheque you write.
How much does the length of stay matter?
It is the biggest lever after price. The example's advantage falls from $45,428 over 7 years to about $9,946 over 3 years, because interest is largest in the early years and rent growth has had less time to compound.
What is the investment return variable actually doing?
It prices the money tied up in the purchase. At a 7% return, an $80,000 down payment is charged to the buy side at $467 a month. A higher return assumption favours renting; a lower one favours buying.
What is not included in this comparison?
Closing costs when you buy, roughly 5–6% of the price to sell, homeowners insurance, the mortgage-interest deduction, and PMI when you put down less than 20%. Utilities and HOA dues on either side are also outside the model, so add them if they differ between your two options.
Related calculators
- Mortgage Payoff CalculatorFind your payoff date and interest saved.
- Mortgage Payment CalculatorEnter a loan amount, interest rate and term to get the monthly payment, total interest and full cost.
- Down Payment CalculatorSee the cash you need at closing, the loan it leaves behind and the payment that follows.
- Amortization CalculatorSee how each mortgage payment splits between interest and principal, plus your payoff date and total interest.
- Refinance Break-Even CalculatorEnter closing costs and your old and new payments to see how many months until refinancing pays for itself.
- Mortgage Recast CalculatorSee your new monthly payment after a lump sum recast, and how much the payment drops.
- Property Tax CalculatorTurn an assessed home value and a local tax rate into an annual and monthly property tax number.
- How Much House Can I Afford?Enter income, down payment, rate, term and your comfort zone to estimate the house price you can carry.
- PMI CalculatorWork out the monthly private mortgage insurance below 20% down, how long it runs and what it costs in total.
Last updated October 5, 2026. Every figure is an estimate produced in your browser — see the methodology and its limits.