Advanced Rent vs Buy Calculator

Rent vs Buy is one of the biggest financial decisions you can make. This calculator performs a detailed comparison over your chosen time horizon, accounting for appreciation, investment returns, and all recurring costs.

What makes it the advanced one is that the two assumptions doing most of the work are yours to set. Home appreciation and investment return are inputs here, not constants buried in the code, and moving either by a point or two changes the answer more than the mortgage rate does. Pick how long you plan to stay and the page reports the net cost of each path at exactly that horizon, with the crossover year marked on the chart. For the monthly-cost view, with your own property tax rate, an HOA fee and a 15 or 30 year term, use the rent vs buy calculator instead.

How the calculation works:

For buying, the calculator totals every monthly cost (mortgage, property tax at 1.2%, maintenance at 1%, insurance at 0.4%) over the time period, adds the closing costs you pay going in, then assumes you sell at the end of the horizon and hands you what is left after the agent, the exit closing costs, and the remaining loan balance.

For renting, it totals all rent payments with 3% annual increases over the same period, then credits you the investment gains on the cash you never had to put down.

Net cost comparison:

Net Cost of Buying = Down Payment + Purchase Closing + Total Payments − Net Sale Proceeds

Net Sale Proceeds = Sale Price − Selling Costs − Remaining Loan Balance

Net Cost of Renting = Total Rent Paid − Investment Gains on the Same Cash

Notice that the renter invests the down payment and the closing costs, since neither leaves their account. Comparing only the down payment quietly hands the buyer a few thousand dollars of free money.

What each variable means:

• Monthly Rent: your current or expected rent payment.
• Home Purchase Price: the total price of the home.
• Down Payment (%): percentage of the purchase price paid upfront. This amount gets invested instead if you choose to rent.
• Mortgage Rate (%): your annual interest rate on a 30-year fixed mortgage.
• Time Horizon: how many years you plan to stay. This is the most important variable.
• Home Appreciation and Investment Return: the two assumptions that swing the answer most, which is exactly why they are inputs here rather than buried in the code.

Practical example: Rent = $2,000/month, home price = $400,000, 20% down ($80,000), 6.5% mortgage rate, 10-year horizon. The calculator compares all buying costs and the money left after selling against total rent paid and the growth of the $92,000 (down payment plus closing) invested at 7%.

Key insight: the 5-7 year rule of thumb dates from an era of 3% mortgages. At 6.5% the crossover typically lands nearer ten years, because interest consumes most of what the appreciation earns. Move the appreciation input to 6% and it snaps back to five or six years, which tells you how much of the popular advice is really a bet on the housing market rather than a fact about mortgages.

Assumptions you can change below: home appreciation, investment return, and the two transaction-cost percentages. Rent growth is fixed at 3% and the insurance, tax and maintenance rates are those listed above.