CompoundInterestCalc
Free online tool · Real estate

Rent vs Buy Calculator

Should you rent or buy? It's rarely about the monthly payment alone. This free rent vs buy calculator compares the two paths honestly: it pits buying a home against renting and investing the difference, then tracks the net worth of each over time.

Factor in home appreciation, investment returns, rent increases, taxes, maintenance and closing costs, and see the one number that matters — how many years you'd need to stay for buying to come out ahead. No account, no sign-up.

Rent vs buy
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10 years
▶ Market & cost assumptions
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Buying wins
Net worth advantage
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If you buy
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If you rent
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Break-even
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Net worth over time
Buy Rent & invest

Estimates are for illustration and education only — not financial advice. Results are highly sensitive to your assumptions about appreciation, returns and how long you stay.

The math

How renting and buying really compare

The honest comparison isn't rent versus a mortgage payment. It's the total cost of each over your time horizon — including the money renting frees up to invest, and the equity and appreciation buying builds.

Cost of buying = Upfront + carrying costs − equity − appreciation
Carrying costs include mortgage interest, property tax, insurance, and maintenance — the money you never get back.
Cost of renting = Total rent paid − growth on your invested savings
A fair comparison invests the down payment and any monthly savings a renter keeps, then credits that growth back.
Worked example. Buying a $400,000 home with 20% down carries roughly $2,500/month, but a chunk of that builds equity and the home may appreciate. Renting a similar place for $2,200 frees the $80,000 down payment to invest. Over a short stay, high buying costs usually win it for renting; past the break-even point — often around 5–7 years — buying typically pulls ahead.
See it in action

When buying wins — and when it doesn't

The same home flips from a bad deal to a good one purely based on how long you stay. Load any scenario to explore.

Quick guide

How to use the rent vs buy calculator

Four short steps. Every field updates the verdict, the break-even year and the net-worth chart instantly.

Step 1

Enter rent and home price

Compare a home you'd rent against a similar one you'd buy. Use realistic numbers for your area.

Step 2

Set down payment and rate

Your down payment and mortgage rate shape the loan — and how much cash the renter gets to invest instead.

Step 3

Choose how long you'll stay

This is the biggest lever. Slide it and watch the verdict flip — short stays favour renting, long stays favour buying.

Step 4

Tune the assumptions

Open the advanced options for appreciation, investment return, rent growth, taxes, maintenance and transaction costs.

Good to understand

How this comparison works

A fair rent-vs-buy comparison isn't "mortgage payment vs rent." It's about total wealth. This calculator gives both paths the same money to spend each month and invests whatever is left over, then compares how much you'd be worth at the end.

The buyer's net worth

If you buy, your wealth is your home equity — the home's value minus selling costs and the remaining loan — plus any months where owning was cheaper than renting and you invested the surplus. Equity builds slowly at first, because early mortgage payments are mostly interest.

The renter's net worth

If you rent, you skip the down payment and closing costs — so the calculator invests that cash from day one, plus any month where rent was cheaper than owning. This is the opportunity cost that pure "rent is throwing money away" thinking ignores.

Why the break-even year is everything

Buying carries heavy upfront and exit costs — typically 3% to buy and 6% to sell. It takes years of equity growth and appreciation to overcome them. The break-even year is when the buyer's net worth finally overtakes the renter's. Stay longer and buying usually wins; leave sooner and renting often does.

Who it's for

Anyone weighing a home purchase, especially if you're unsure how long you'll stay. Pair it with the affordability calculator to check what you can afford, and the mortgage calculator for the exact payment.

Browse all our free calculators for saving, investing and retirement.

Quick answers

Rent vs buy FAQ

Is renting really "throwing money away"?
Not necessarily. Renters avoid the down payment, closing costs, maintenance and selling fees — and can invest that money instead. Over short horizons, or when investment returns beat home appreciation, renting and investing frequently builds more wealth than buying.
What is the break-even year?
It's the number of years you'd need to own the home before buying leaves you wealthier than renting and investing. Below it, renting wins; above it, buying wins. It's the single most useful output of this tool.
What investment return should I use?
The return is what the renter earns on the money they didn't spend on a home. A broad stock index has historically returned around 7% a year over long periods, though this varies widely. Try a conservative figure too — the comparison is very sensitive to it.
Does it include maintenance and taxes?
Yes. Open the advanced options to set property tax, annual maintenance as a percentage of the home's value, buying costs and selling costs. These real ownership expenses are exactly what make short stays favour renting.
Is this financial advice?
No. It's an educational model based on assumptions you provide. It can't predict home prices or markets, and it ignores personal factors like stability, flexibility and the value of owning your home. Use it to inform a decision, not make it for you.