Rent vs Buy Calculator
Compare the costs of renting vs buying a home
About This Calculator
The Rent vs Buy Calculator compares the costs of renting versus buying a home over a specified time period. It accounts for rent increases, mortgage payments, property taxes, insurance, and maintenance to help you make an informed decision.
How It Works
- 1
Enter your current monthly rent.
- 2
Input the home purchase price and down payment.
- 3
Provide mortgage details: interest rate and loan term.
- 4
Enter annual property tax, home insurance, and monthly maintenance costs.
- 5
Specify expected annual rent increase percentage.
- 6
Set the time period for comparison (typically 5-10 years).
- 7
The calculator compares total costs and shows which option is more cost-effective.
Formula Explanation
Monthly Mortgage = P × [r(1+r)^n] / [(1+r)^n - 1]Standard mortgage payment formula where P is loan amount, r is monthly interest rate, and n is number of payments.
Total Monthly Cost = Mortgage + (Property Tax/12) + (Insurance/12) + MaintenanceAdd all monthly housing costs to get total monthly cost of ownership.
Total Rent Cost = Sum of annual rent with increases over time periodCalculate cumulative rent costs accounting for annual rent increases over the comparison period.
Tips
Consider your time horizon - buying typically makes more sense for longer stays.
Factor in home appreciation potential when buying.
Renting offers flexibility but no equity building.
Don't forget closing costs and home maintenance when buying.
Rent increases can significantly impact long-term rental costs.