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Rent vs. Buy Calculator

Compares the net cost of renting with the net cost of buying a home over a chosen number of years: rent with annual increases versus mortgage payments, property tax, maintenance, transaction costs and the opportunity cost of the upfront cash, net of the equity recovered when the home is sold.

Monthly rentRent today for a comparable home. Annual rent increase (%/year) (optional)Yearly rent growth in percent. Home pricePurchase price of the home. Down paymentCash paid at purchase; the rest is financed. Mortgage rate (%)Fixed annual mortgage rate in percent. Mortgage term (years) (optional)Mortgage term in years. Property tax (% of value/year) (optional)Annual property tax as a percent of the home's value that year. Maintenance, insurance and HOA (% of value/year) (optional)Annual upkeep, insurance and association dues as a percent of the home's value that year. Home appreciation (%/year) (optional)Yearly growth of the home's value in percent. Investment return (%/year) (optional)Annual return the renter could earn on the down payment and closing costs instead. Horizon (years)How many years you expect to stay before selling or moving. Buying closing costs (% of price) (optional)One-off purchase costs (lender fees, title, transfer tax) as a percent of the price. Selling costs (% of sale price) (optional)Agent commission and other costs when selling, as a percent of the sale price.

When to use

You want a first-order comparison of renting against buying for a given horizon, rate, appreciation and investment-return assumption.

Do not use when: You need tax deductions, rent-controlled scenarios or month-by-month cash-flow modelling; the model is annual and simplified. For the mortgage payment alone use mortgage-payment.

Formula

rent_total = Σ_{y=0}^{years−1} 12 × monthly_rent × (1 + g)^y. loan = home_price − down_payment; P&I from the annuity formula; value_y = home_price × (1 + a)^y; ownership_costs = Σ value_y × (tax% + maintenance%)/100; upfront = down_payment + closing% × home_price; opportunity = upfront × ((1 + r)^years − 1); equity = value_years × (1 − selling%) − balance_after(12 × years); buy_total = upfront + P&I × months + ownership_costs + opportunity − equity; advantage = rent_total − buy_total

Annual model with costs based on the home value at the start of each year. It ignores income-tax effects (mortgage-interest deduction, capital-gains exclusion), renter's insurance, and the investment of any monthly cash-flow difference between the two options; only the upfront cash is treated as invested. Results are sensitive to the appreciation and return assumptions.

Inputs

Parameter	Type	Unit	Required	Description
`monthly_rent`	number		yes	Rent today for a comparable home. Range: > 0, ≤ 1000000
`rent_growth_percent`	number	%/year	default 3	Yearly rent growth in percent. Range: ≥ -10, ≤ 30
`home_price`	number		yes	Purchase price of the home. Range: > 0, ≤ 10000000000
`down_payment`	number		yes	Cash paid at purchase; the rest is financed. Range: ≥ 0, ≤ 10000000000
`annual_rate_percent`	number	%	yes	Fixed annual mortgage rate in percent. Range: ≥ 0, ≤ 100
`term_years`	number	years	default 30	Mortgage term in years. Range: > 0, ≤ 50
`property_tax_percent`	number	% of value/year	default 1.2	Annual property tax as a percent of the home's value that year. Range: ≥ 0, ≤ 10
`maintenance_percent`	number	% of value/year	default 1	Annual upkeep, insurance and association dues as a percent of the home's value that year. Range: ≥ 0, ≤ 10
`home_appreciation_percent`	number	%/year	default 3	Yearly growth of the home's value in percent. Range: ≥ -20, ≤ 30
`investment_return_percent`	number	%/year	default 7	Annual return the renter could earn on the down payment and closing costs instead. Range: ≥ -50, ≤ 50
`years`	integer	years	yes	How many years you expect to stay before selling or moving. Range: ≥ 1, ≤ 40
`buying_closing_costs_percent`	number	% of price	default 3	One-off purchase costs (lender fees, title, transfer tax) as a percent of the price. Range: ≥ 0, ≤ 15
`selling_costs_percent`	number	% of sale price	default 6	Agent commission and other costs when selling, as a percent of the sale price. Range: ≥ 0, ≤ 15

Outputs

Output	Type	Description
`total_cost_of_renting`	number	Sum of rent over the horizon with annual increases.
`total_cost_of_buying`	number	Upfront cash + mortgage payments + tax and maintenance + opportunity cost of upfront cash − net equity at sale.
`net_advantage_of_buying`	number	total_cost_of_renting − total_cost_of_buying (positive = buying is cheaper over the horizon).
`better_option`	string	'Buying' or 'Renting' under these assumptions.
`monthly_principal_and_interest`	number	Level monthly payment on home_price − down_payment.
`total_mortgage_payments`	number	P&I × months in the horizon (capped at the loan term).
`total_property_tax_and_maintenance`	number	Σ home value at the start of each year × (property_tax_percent + maintenance_percent)/100.
`upfront_cash`	number	down_payment + buying closing costs.
`opportunity_cost_of_upfront_cash`	number	upfront_cash × ((1 + investment_return)^years − 1): return the renter would have earned on that cash.
`home_value_at_end`	number	home_price × (1 + appreciation)^years.
`loan_balance_at_end`	number	Remaining mortgage principal after the horizon.
`net_equity_at_sale`	number	home_value_at_end × (1 − selling_costs_percent/100) − loan_balance_at_end.
`average_monthly_cost_of_renting`	number	total_cost_of_renting / months.
`average_monthly_cost_of_buying`	number	total_cost_of_buying / months.

Example

Rent 2,000 vs 400,000 home, 80,000 down, 6.5 %, 10 years: {"monthly_rent":2000,"rent_growth_percent":3,"home_price":400000,"down_payment":80000,"annual_rate_percent":6.5,"term_years":30,"property_tax_percent":1.2,"maintenance_percent":1,"home_appreciation_percent":3,"investment_return_percent":7,"years":10} → {"total_cost_of_renting":275133.1,"total_cost_of_buying":290545.23,"net_advantage_of_buying":-15412.13,"better_option":"Renting","monthly_principal_and_interest":2022.62,"total_mortgage_payments":242714.12,"total_property_tax_and_maintenance":100882.14,"upfront_cash":92000,"opportunity_cost_of_upfront_cash":88977.92,"home_value_at_end":537566.55,"loan_balance_at_end":271283.6,"net_equity_at_sale":234028.95}

Rent 2,500 vs 350,000 home, 70,000 down, 5.5 %, 4 % appreciation, 15 years: {"monthly_rent":2500,"home_price":350000,"down_payment":70000,"annual_rate_percent":5.5,"home_appreciation_percent":4,"investment_return_percent":6,"years":15} → {"total_cost_of_renting":557967.42,"total_cost_of_buying":235331.02,"net_advantage_of_buying":322636.4,"better_option":"Buying","monthly_principal_and_interest":1589.81,"net_equity_at_sale":397939.2,"average_monthly_cost_of_renting":3099.82,"average_monthly_cost_of_buying":1307.39}

GET https://tttkmbb.com/api/v1/calculate/rent-vs-buy?monthly_rent=2000&rent_growth_percent=3&home_price=400000&down_payment=80000&annual_rate_percent=6.5&term_years=30&property_tax_percent=1.2&maintenance_percent=1&home_appreciation_percent=3&investment_return_percent=7&years=10

Machine access

API: GET https://tttkmbb.com/api/v1/calculate/rent-vs-buy (query parameters) or POST with a JSON body {"inputs": {...}}
Schema: https://tttkmbb.com/api/v1/calculators/rent-vs-buy · Markdown: https://tttkmbb.com/finance/rent-vs-buy.md · JSON definition: https://tttkmbb.com/finance/rent-vs-buy.json
MCP: server https://tttkmbb.com/mcp, tool run_calculator with calculator_id="rent-vs-buy"
OpenAPI operationId: compare_rent_vs_buy
Freshness: static. Authentication: none. Rate limit: fair use (see rate limits).

Sources

CFPB – Owning a Home: loan costs and monthly payment components (government)
Wikipedia – Opportunity cost (reference)
Wikipedia – Mortgage loan (reference)

FAQ

Why does a short horizon favour renting?

Buying and selling cost roughly 9 % of the price in this model (3 % + 6 %), and early mortgage payments are mostly interest, so equity builds slowly; those fixed costs need several years of appreciation and rent growth to be recovered.

What is the opportunity cost line?

The down payment and closing costs could have been invested. Their forgone return (not the principal, which the buyer recovers as equity) is counted as a cost of buying.

Which return should I assume?

Use the same basis for both sides: a nominal investment return with nominal appreciation and rent growth. Long-run US figures are roughly 7 % for equities, 3–4 % for house prices and 3 % for rents, but local values vary widely.

Related calculators

Mortgage Payment Calculator — Full monthly payment with taxes and insurance.
Compound Interest Calculator — Growth of the down payment if invested instead.
Inflation Calculator — Express future amounts in today's money.