Rent vs Buy Calculator

Buying

Home price ($) Down payment (%) Interest rate (%) Loan term

Property tax (% of value a year) Homeowners insurance ($ a year) HOA dues ($ a month) PMI rate if under 20% down (%)

Upkeep (% of value a year, your estimate) Buying costs (% of price) Selling costs when you leave (%) Home value change (% a year, your assumption)

Renting

Monthly rent ($) Rent increase (% a year, your assumption) Renters insurance ($ a month) Investment return (% a year, your assumption)

Years you expect to stay

Every growth rate here is an assumption you control. Starting values are examples, not forecasts.

The rate box starts at Freddie Mac's PMMS 30-year average for the week of November 5, 2026 (7.18%; 15-year 6.57%, source). That is a national average, not a quote. Type the rate on your Loan Estimate.

How to use it

Fill in the home you are considering and the rent you would pay instead, then set the number of years you expect to stay. The default numbers are examples only. Change the growth rates to see how sensitive the answer is.

How the comparison works

The calculator follows two households month by month.

The buyer pays the down payment and buying costs up front, then each month pays principal and interest, PMI if the down payment was under 20% (until the balance reaches 78% of the price), property tax, insurance, HOA dues and upkeep. Tax and upkeep grow with the home's value.
The renter invests the cash the buyer spent at the start. Each month, the renter pays rent and renters insurance, and invests the difference whenever renting costs less than owning. If renting costs more, the renter draws from savings.
At the end, the buyer sells: the home's value minus selling costs minus the loan balance is the buyer's equity. The renter has the investment balance. Whichever is larger came out ahead.

Worked example (illustrative assumptions)

A $400,000 home with 10% down at 6.5% for 30 years has principal and interest of $2,275.44. With 1% property tax, $1,800 a year of insurance, PMI at 0.5% and 1% a year for upkeep, owning costs about $3,242 a month at first. The alternative is $2,200 rent plus $15 renters insurance. Assume 3% a year for home prices and rent, 5% for investments, 3% buying costs and 6% selling costs.

After 7 years, the home is worth about $491,950, the loan balance is about $325,498, and the buyer's equity after selling costs is about $136,934. The renter's investments are about $163,217, so renting is ahead by about $26,000. Stay 12 years and buying is ahead by about $4,800; at 20 years, by about $118,000.

The point of the example is the shape, not the numbers: buying usually starts behind because of the one-time costs and catches up the longer you stay. Where it crosses over depends heavily on your assumptions. In the example, raising home price growth to 4% a year, or the rent to $2,600, is enough to put buying ahead at 7 years.

Choosing assumptions

Home prices and rents vary by city and decade. Local history is a better guide than a national number, but no past rate is a forecast.
Investment return. Use a rate that reflects how you would actually invest the money, after fees.
Upkeep. Older homes and big yards cost more. Look at the age of the roof, furnace and water heater.
Buying costs. Freddie Mac says closing costs typically run 2% to 5% of the purchase price.
Selling costs. Agent commissions, transfer taxes and other charges vary by state and by what you negotiate; enter what you expect to pay.

What it leaves out

Taxes on investment gains, the mortgage interest deduction, moving costs, rent deposits, and the non-financial reasons people buy or rent, such as stability, flexibility and control over the home. It also assumes the buyer keeps the same fixed-rate loan.

This comparison is educational. It is not advice about whether you should buy.

Common questions

Isn't rent just throwing money away?

Rent buys housing, as mortgage interest, property tax, insurance and upkeep do for an owner. Only the principal part of a mortgage payment builds equity, and in the early years it is the smallest part.

Why does a short stay favor renting?

Buying costs (closing costs) and selling costs are paid once each, however long you stay. Over two or three years they can outweigh the equity you build.

Does this include tax deductions?

No. Whether the mortgage interest and property tax deductions help depends on whether you itemize. Taxes on investment gains are also left out.

Rent vs Buy Calculator: Compare Net Worth Over Time