Rent vs Buy Calculator

The question this actually answers

Rent-versus-buy arguments usually compare a mortgage payment to a rent payment, which is not a fair fight. A mortgage builds equity while rent does not; but a house also demands property tax, insurance, maintenance, HOA dues and closing costs that rent never asks for. Meanwhile the money you do not sink into a house can be invested.

This tool compares the two paths the way a spreadsheet should: it tracks every recurring cost on both sides, grows the rent annually, appreciates the home, amortises the mortgage, invests the monthly difference between the two choices, and then asks what you would walk away with at the end.

Why foregone gains matter as much as costs

A $90,000 down payment is not just spent — it stops earning anything else. At a 7% average return that cash would compound into roughly $180,000 over ten years, an opportunity cost most rent-versus-buy comparisons ignore.

This calculator adds that forgone return to the renting side, along with any monthly saving from renting, so both paths are measured in the same currency: net worth at the end of your analysis window.

The inputs that dominate the answer

Transparency matters here because the conclusion is highly sensitive to a handful of assumptions:

• How long you stay — transaction costs of roughly 3% buying and 6% selling take years to recover, and short stays almost always favor renting.
• Home appreciation — your assumption drives most of the buying advantage. Anything above long-run inflation should be treated as optimistic.
• Rent growth — renting looks artificially good if you assume rent never rises, yet leases reset constantly.
• Maintenance — a reasonable default is 1% of home value per year, higher for older properties.
• Opportunity cost of the down payment — set your investment return honestly, not at whatever number wins the argument.

Reading the crossover year

The crossover is the point at which accumulated home equity overtakes everything the renter has banked. Before that year, renting wins financially; after it, buying usually pulls ahead.

If your realistic time horizon is shorter than the crossover year, renting is very likely the better financial choice regardless of what feels like "throwing money away." Ownership also has non-financial benefits — stability, control over renovations and a fixed housing cost — which are legitimate reasons to buy even when the arithmetic is close.