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Rent vs Buy Calculator

Compare total housing costs of renting versus buying over your planned stay—including equity, maintenance, and opportunity cost.

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Rent vs Buy: Key Considerations

How Long Will You Stay?

Buying typically makes more sense if you'll stay 5+ years due to closing costs and transaction fees.

Opportunity Cost

Your down payment could grow if invested in the stock market instead of a home.

Hidden Costs of Ownership

Maintenance, repairs, property taxes, and insurance add 1-3% of home value annually.

Rising Rent vs Fixed Mortgage

Rent increases over time while a fixed-rate mortgage payment stays constant.

How this calculator works

Renting total = monthly rent × months + renters insurance. Buying total = down payment + mortgage payments + taxes + insurance + maintenance − estimated equity gained. Breakeven when cumulative buying cost falls below renting.

Inputs

  • Home price and down payment — upfront cash and loan size for buying.
  • Mortgage rate and term — monthly P&I for the purchase scenario.
  • Monthly rent alternative — cost of comparable rental.
  • Years planned to stay — shorter horizons usually favor renting.

Assumptions

  • Home appreciates at the entered annual rate (default modest growth).
  • Maintenance averages 1–2% of home value per year.
  • Closing costs on purchase and sale are simplified.

Limitations

  • Does not model tax deductions, PMI removal timing, or HOA special assessments.
  • Emotional and lifestyle factors (stability, customization) are not quantified.
  • Market timing and interest rate changes can shift breakeven quickly.

Example calculation

  1. Compare $2,000/month rent vs $350,000 home, 20% down, 7% mortgage.
  2. Monthly ownership ≈ $2,800 including taxes, insurance, maintenance.
  3. Equity buildup partially offsets higher monthly cost.
  4. At 5-year horizon, renting may total less than buy+sell transaction costs.
  5. Breakeven often 7–10 years depending on market appreciation.
Result: Renting may cost less over 5 years; breakeven ~7–10 years in many markets

Buying builds equity but concentrates risk in one property. Renting preserves flexibility and down-payment liquidity. Your stay length is the biggest variable.

Common mistakes

Comparing rent to mortgage only

Ownership adds taxes, insurance, maintenance, and transaction costs. Use all-in monthly and total cost.

Assuming home prices always rise

Flat or declining markets extend breakeven. Stress-test with zero appreciation.

Ignoring selling costs

Agent commissions and closing fees (6–10% total) affect net proceeds when you sell within a few years.

Frequently asked questions

Depends on stay length, local prices, and personal finances. Short stays often favor renting; long stays may favor buying.

When total buying cost (net of equity) falls below cumulative rent for the same period—often 5–10 years.

Tax benefits vary with SALT caps and standard deduction. This calculator uses simplified totals without itemized tax modeling.

More down payment reduces mortgage interest but ties up cash that could earn returns elsewhere.

Renters can invest down-payment savings. Buying forces equity savings through mortgage principal paydown.

Transaction costs on a quick sale often make renting cheaper for horizons under 5 years.

Disclaimer

LeaseCraft provides document automation and general information — not legal, tax, or financial advice. Calculator results are estimates for planning only. Consult a licensed attorney, accountant, or housing counselor for advice about your situation.

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