Rent vs. Buy Calculator
Use this free Rent vs Buy Calculator to calculate your Rent or buy decision instantly and accurately.
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Comparison
What is a Rent vs Buy Calculator?
A Rent vs Buy Calculator compares the monthly cost of renting a home versus buying one. It factors in the mortgage payment, property taxes, insurance, and upkeep to give you a clear apples-to-apples monthly comparison.
How to compare rent vs buy manually (the formula)
Calculate the monthly mortgage payment using: Monthly Payment = P × r(1+r)^n / ((1+r)^n - 1) where P is the loan amount, r is the monthly interest rate (annual rate / 12 / 100), and n is the number of months. Then add monthly property tax, insurance, and upkeep. Compare this total to your monthly rent.
Example calculation
Rent is $1,800/month. A $350,000 home with $70,000 down (loan = $280,000) at 6.5% for 30 years: mortgage P&I = $1,770. Adding $292/month tax and $250/month insurance/upkeep gives $2,312/month total owning cost. Renting is cheaper by $512/month.
Common mistakes
- Comparing only mortgage to rent — Owning includes property tax, insurance, and maintenance. Include all costs for a fair comparison.
- Ignoring the down payment — A larger down payment reduces the loan amount and monthly payment significantly.
- Forgetting about equity — Buying builds equity over time. Even if the monthly cost is higher, you are building wealth.
Frequently asked questions
How do I compare renting vs buying a home?
Compare the monthly cost of renting (rent) versus the monthly cost of owning (mortgage payment + property tax + insurance + upkeep). Our calculator does this side by side.
What costs are included in buying?
Buying costs include the mortgage principal and interest, property taxes, homeowners insurance, and ongoing upkeep. Our calculator combines these into one monthly owning cost.
Does renting or buying build wealth?
Buying builds equity as you pay down the mortgage and the property appreciates. Renting does not build equity but offers flexibility and lower upfront costs.
What is the break-even point for renting vs buying?
The break-even point is when the cumulative cost of owning becomes less than renting. This depends on how long you stay, home appreciation, and your down payment.
Is this calculator free?
Yes, completely free with no sign-up required.