Rent vs Buy Calculator: Compare Costs and Net Wealth

Rent vs Buy Calculator

Compare the modeled net wealth of renting and buying over the same time horizon. The calculation includes financing, ownership costs, rent increases, home appreciation, selling costs and the opportunity cost of cash.

Planning estimate, not financial advice. Results depend heavily on uncertain future rates and costs. This calculator does not include income-tax deductions, investment taxes, local transfer taxes, rent control, renovations or every loan condition.

Renting assumptions

Buying and mortgage assumptions

Enter the quoted amount if applicable; automatic cancellation is not assumed.

Ownership, sale and opportunity-cost assumptions

Applied to upfront cash and monthly cash-flow differences.

Modeled comparison

—
Home net equity after sale—
Renter opportunity account—
Monthly mortgage principal + interest—
First modeled crossover—
Projected home value—
Mortgage balance—
Total rent + renter insurance—
Buyer upfront cash—

YearHome valueMortgage balanceNet equity if soldRenter opportunity accountBuy advantage

How the comparison works

The buyer starts with a down payment and estimated closing costs. The renter is modeled as keeping that same upfront cash in an opportunity account. Each month, the account grows at the selected alternative return and receives the amount by which buying costs more than renting—or is reduced when renting costs more.

Buyer net equity = projected home value − selling costs − remaining mortgage balance
Renter opportunity account = buyer upfront cash grown at the selected return + accumulated monthly cost differences
Buy advantage = buyer net equity − renter opportunity account

The mortgage uses standard fixed-rate amortization. Property tax, insurance and maintenance are recalculated monthly from the modeled home value. Rent increases once per completed year. A sale is assumed at every comparison point so selling costs are consistently included.

Six checked component examples

InputChecked result
$120,000 loan, 0% APR, 10 years$1,000 monthly principal and interest
100% down payment$0 mortgage principal and interest
$400,000 home, 3% appreciation, 5 years$463,709.63 projected value
$2,000 rent with 3% annual increase$2,060 monthly rent in year 2
$400,000 home and 1.2% annual property tax$400 initial monthly property tax
$500,000 sale value and 6% selling cost$470,000 proceeds before mortgage payoff

Important limits

  • The result is a scenario, not a forecast. Home prices, rents, investment returns, insurance, taxes and maintenance can differ materially.
  • Income-tax effects are excluded because eligibility, deduction value and tax rates vary. Investment taxes and inflation are also excluded.
  • Utilities, deposits, moving costs, renovations, special assessments, refinancing and transaction-specific fees are not modeled unless reflected in an entered assumption.
  • The opportunity account may become negative when renting costs more than buying. That represents a modeled cumulative cash-flow deficit, not an available investment balance.
  • The first crossover is not guaranteed to persist; review the annual table and test conservative and adverse assumptions.

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