Rent vs Buy Calculator

By Calxy · Calculation methodology

Compare renting and buying year by year, including closing and selling costs, maintenance, appreciation, rent growth and invested monthly savings.

Printed from Calxy · https://www.calxy.net/financial/rent-vs-buy-calculator

Buying minus renting: ending modeled wealth-$5,451.92
USD

1 – 1000000000

USD

0 – 1000000000

USD

0 – 1000000000

%

0 – 30

years

1 – 50

years

1 – 40

USD

0 – 1000000000

%

-20 – 20

USD

0 – 1000000000

%

0 – 20

%

-20 – 20

%

-20 – 20

%

-50 – 50

%

0 – 25

Buying minus renting: ending modeled wealth

-$5,451.92

  • Owner net sale equity$151,463.02
  • Owner invested monthly savings$0.00
  • Renter investment balance$156,914.93
  • Remaining mortgage balance$253,165.49
  • Mortgage interest paid$121,827.88
  • First modeled buy-over-rent crossoverNot within 7 years
Annual rent-versus-buy comparison in USD
YearHome valueMortgage balanceRenter portfolioBuying minus renting
1360500.00276870.3790939.05-28939.42
2371315.00273531.14101920.26-26415.30
3382454.45269968.28112929.38-23390.47
4393928.08266166.80123950.90-19825.31
5405745.93262110.74134968.04-15677.60
6417918.30257783.03145962.60-10902.42
7430455.85253165.49156914.93-5451.92

Positive favors buying under these assumptions. Maintenance follows estimated home value; other owner costs use the entered growth rate. Constant investment returns, monthly-end deposits and no income-tax benefits, investment taxes, PMI or moving costs. Include expected PMI in annual owner costs if applicable. A forecast does not capture location preferences or risk.

How this was calculated

Start the renter’s portfolio with the down payment and buying costs avoided.

Each month, the cheaper option invests the difference in housing outlays.

At the horizon, subtract sale costs and mortgage balance from home value, then compare total wealth.

Formula and method

Start the renter with the down payment and buying costs they avoid. Each month, invest the difference for whichever option costs less. At the horizon, compare the renter portfolio with the owner portfolio plus home sale proceeds after selling costs and mortgage payoff.

Worked example

For a $12,000 home bought entirely with cash, no price growth or sale costs, $1,200 annual owner costs and $100 monthly rent, both options cost the same each month. With a 0% investment return and no buying fees, ending wealth is equal after one year.

References

Frequently asked questions

Why does the comparison include a renter investment balance?

Buying ties up cash that could otherwise stay invested. Comparing rent only against mortgage interest omits that opportunity cost. Assumed returns, home values, maintenance and holding period can change the result substantially.

Last updated . Results are estimates for informational purposes only.