Rent vs. Buy Calculator
Compare the full cost of renting with buying a home, including taxes, insurance, maintenance, tax savings, and the equity you build over time.
Renting vs. Buying: What the Calculator Compares
Comparing rent with a mortgage payment alone misses most of the picture. Owning adds property taxes, insurance, and maintenance, but part of every payment builds equity, the home may appreciate, and mortgage interest and property taxes may be deductible. Renting costs less up front and leaves your down payment free to invest.
Enter your current rent, the price of the home you are considering, your down payment, and how long you plan to stay. The calculator totals the cost of each choice over that period, after accounting for equity and tax effects. The length of time you stay is usually the deciding factor, because the costs of buying and selling are spread over more years.
Rule of thumb: Buying tends to come out ahead when you plan to stay at least five to seven years. Over shorter periods, closing costs on the purchase and selling costs later can outweigh the equity you build.
Common Questions
Is it always better to buy than rent?
No. It depends on how long you will stay, the price of homes compared with rents in the area, and what else you would do with your down payment.
What costs of owning do people overlook?
Maintenance and repairs, which commonly run about 1% of the home’s value per year, along with HOA dues and higher utility bills.
How do taxes affect the comparison?
If you itemize, mortgage interest and property taxes may reduce your taxable income, within federal limits. Ask your tax advisor how this applies to you.