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Rent vs Buy Calculator

Wealth after owning vs renting, same monthly budget.

PrivateFreeSourcedReviewed

At 7 years, renting comes out ahead by

$73,824

$450,000 home · 20% down at 6.360% vs $2,000/mo rent
Renter wealth
$305,731

after 7y

Owner wealth
$231,907

after 7y

Owning, per month
$3,180

year 1, vs $2,000 rent

After 7 years the renter is ahead: investing the $103,500 down payment and closing costs at 8% grows faster than the home's equity once $35,530 of selling costs come out.

Try a what-if

How each side adds up after 7 years

Renter: $305,731

Investment portfolio: $103,500 invested up front (down payment + closing costs) + $92,894 of monthly savings vs owning, grown at 8%/yr. Rent ($183,899 total) was paid from the monthly budget.

Owner: $231,907

Home value $592,169 − mortgage left $324,732 − 6% selling costs $35,530. Owner costs ($276,793 total) were paid from the monthly budget.

Equal-budget model: each month both households spend the same; the cheaper side invests the difference.

Your numbers

$2,000

$450,000

20% down

6.360% APR

7 years

Renting assumptionsRent +3%/yr · invest at 8%

3.00% / year

8.00% / year

Owning costs & growthClosing 3% · tax 1.1% · upkeep 1% · +4%/yr

3.00% of price

1.10% / year

1.00% / year

$150

4.00% / year

Next steps

The Rent-vs-Buy Calculator compares what you'd actually be worth after owning versus renting, with both households spending the same amount on housing each month. The renter invests the down payment and closing costs instead, and whichever option is cheaper month to month invests the difference. After your time horizon, it compares home equity (after selling costs) with the renter's portfolio. Buying isn't always better; it depends on rates, prices, rent, and how long you stay.

How this calculator works

  1. Enter the home you'd buy: price, down payment, mortgage rate, property tax, insurance, HOA, maintenance, and closing costs.
  2. Enter the rent for a comparable place and how fast rent tends to rise (about 3% a year is the long-run US average).
  3. Set the return the renter earns investing the down payment and any monthly savings.
  4. Set home appreciation (roughly 4% a year long-run, per Case-Shiller) and your time horizon.
  5. Read who ends up with more wealth. Try shorter and longer horizons: buying usually needs several years to overcome closing and selling costs.

owner_wealth = home_value(t) − mortgage_left(t) − selling_costs + owner_side_portfolio vs renter_wealth = invested(down_payment + closing_costs) + invested(monthly_savings)

Equal-budget wealth comparison. Both households spend the same amount each month. The renter invests the down payment and closing costs up front, and whichever side has the cheaper monthly housing cost invests the difference. Owner wealth = home value − mortgage balance left − selling costs (+ any side portfolio). Renter wealth = the renter's portfolio. Whichever is larger after your time horizon wins.

home_value(t)
Purchase price grown at the home appreciation rate for t years
mortgage_left(t)
Remaining loan balance after t years of payments
selling_costs
Agent and transfer costs when you sell (6% default)
monthly_savings
The difference between monthly owning cost (PITI + HOA + maintenance) and rent, invested by whichever side is cheaper

Frequently asked questions

Is it always better to buy than rent?

No. Buying tends to win when you stay long enough to overcome closing and selling costs and the home appreciates fast enough relative to what the down payment would earn invested. With 2026 mortgage rates, renting and investing the difference often wins for the first several years — run your own numbers.

What costs do most people forget when buying?

Property taxes, insurance, HOA fees, maintenance (often 1% of the home value annually), and the opportunity cost of the down payment.

How much down payment do I need?

Conventional loans typically expect 20% to avoid PMI, but FHA, VA, and first-time-buyer programs allow far less if the math still works for your situation.

Sources used in this calculator

Reviewed by the Money Scale editorial team. How we source our data

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