Rent vs buy home calculator
Compare rent and a mortgage with editable assumptions. Educational, not financial advice.
Simulation inputs
Home and purchase
Rent
Advanced assumptionsAppreciation 4% · alternative return 10%These rates move the result a lot. Try conservative and optimistic cases.
Home appreciation and what the down payment could earn if invested while you rent.
Your data is not stored. Everything runs in your browser.
Your result
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Simplified model with fixed rates and no transfer tax, closing costs, insurance, property tax, vacancy, major repairs, or selling costs. Does not predict real markets or replace a realtor, lender, or financial planner.
What is rent vs buy?
There is no one-size-fits-all answer. Renting keeps liquidity and flexibility. Buying builds home equity but concentrates risk and fixed costs. This calculator puts numbers side by side for the horizon you pick, to understand the mechanism, not to lock in a life decision.
Want to understand payments and interest before simulating a purchase?Read the guide →Why simulate before deciding?
Mortgage payment and current rent are only part of the story. Appreciation, rent increases, HOA fees, loan rate, and what the down payment could earn if invested all shift the picture over years. Simulation helps you see trade-offs clearly.
When to use this calculator
Use when weighing owning versus renting a similar home, testing 5- or 10-year scenarios, or stressing assumptions (appreciation, rate, alternative return). Not for different cities, very different homes, or decisions driven mainly by lifestyle or career.
How to read the result
Two main axes:
- Estimated end wealth: for rent, future value of the invested down payment. For buy, equity (home value minus loan balance).
- Accumulated cost: rent paid in the period versus down payment + payments + HOA/maintenance when buying.
- Favorable scenario: whoever ends with higher estimated wealth under your inputs.
- Changing appreciation or alternative return moves the result a lot. Treat this as an educational exercise.
Practical tips
- Use rent for a comparable home (area and size) so the comparison is fair.
- Include HOA, property tax, and average upkeep in the monthly cost line for buying.
- Alternative return: use a net return you realistically expect from investments you know.
- Try different horizons. Buying often sensitizes more over long periods, renting in the short term.
Limitations and warnings
Does not model capital gains tax, transaction costs, homeowner insurance, vacancy, major remodels, price drops, income changes, or early payoff. Rates are fixed. Illustrative output, not investment or credit advice.
How we calculate
Mortgage uses fixed payment (Price) with monthly rate = annual rate ÷ 12. Appreciation and alternative return compound monthly over the horizon.
Rent wealth = future value of down payment. Buy wealth = appreciated price minus loan balance at the date. Accumulated cost sums cash outflows in the period.
Price amortization follows the usual nominal monthly rate convention. Appreciation and alternative return use simplified compounding, as in educational personal-finance spreadsheets.
Frequently asked questions
Does the favorable scenario mean I should buy or rent?
Not automatically. The tool compares estimated wealth under the numbers you enter. Flexibility, risk, quality of life, and income stability are outside the model.
What is alternative return on capital?
It is the annual return you estimate for the down payment if it stayed invested while you rent. It captures the opportunity cost of putting that cash into a home.
How should I estimate home appreciation?
Use local history cautiously, conservative and optimistic cases, or zero to stress-test. Nobody guarantees future appreciation.
Does this replace financial or real-estate advice?
No. It is educational material with transparent formulas. Real contracts, taxes, and loan products need qualified professionals.
Why are transfer tax, closing, and property tax missing?
To keep the model readable and fully editable by you. Add those amounts manually to the down payment, monthly costs, or more conservative assumptions.