Your numbers
Quick answer
What does the Rent vs buy calculate?
Which option costs less over your expected time horizon? This calculator uses monthly rent, home price, down payment, mortgage rate, and comparison period to estimate five-year cost comparison immediately in your browser.
With the values currently entered, the result is Renting — has the lower unrecoverable cost. It also shows rent paid, estimated ownership cost, and principal repaid.
How to use the Rent vs buy
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Monthly rent
- Home price
- Down payment — entered in %
- Mortgage rate — entered in %
- Comparison period — entered in years
Rent vs buy formula
Compare rent paid with mortgage interest, ownership costs, transaction costs, and estimated equity
Assumptions
- Ownership costs use 2% of home value per year.
- Buying and selling costs total 8%; appreciation is excluded.
Practical guide
Rent vs buy example and edge cases
Rent versus buy is mostly a time-horizon question. Transaction costs matter more when you move again quickly.
Example: Comparing five years in one home
Compare rent of 2,100 per month with a 400,000 home, a 20% down payment, a 6% mortgage rate, and five years of ownership.
- Monthly rent
- 2,100
- Home price
- 400,000
- Down payment
- 20 %
- Mortgage rate
- 6 %
- Comparison period
- 5 years
Calculated resultRentinghas the lower unrecoverable cost
Run the comparison again with a shorter stay. Buying often looks very different when the timeline shrinks.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Buying builds equity, but interest, maintenance, taxes, and transaction costs are still real costs.
- Renting can be the better financial choice when it keeps you flexible. Ownership is not automatically cheaper.
Edge cases worth checking
Home prices fall
The estimate depends on the entered value assumptions. Test a flat or lower resale value before deciding.
Rent rises each year
This version uses the entered rent as the comparison base. Run a second scenario with the expected future rent.
What changes the result most
Monthly rent
Use a current amount for monthly rent. Include fees or recurring costs that belong in the same figure.
Home price
Use a current amount for home price. Include fees or recurring costs that belong in the same figure.
Down payment
Test a lower and higher down payment. A small percentage change can move the final result more than expected.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Monthly rent: 10% lower
1,980Rentinghas the lower unrecoverable cost
Monthly rent: 10% higher
2,420Rentinghas the lower unrecoverable cost
Home price: 10% higher
462,000Rentinghas the lower unrecoverable cost
Common mistakes
Check monthly rent
Ownership costs use 2% of home value per year. Make sure this matches the number you enter.
Keep comparison period consistent
Buying and selling costs total 8%; appreciation is excluded. Use the same units and time period throughout the calculation.
Do not rely on one rent vs buy scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
Which option costs less over your expected time horizon?
It cannot replace a lender quote, lease, survey, or purchase contract.