Rent vs Buy Calculator
See when owning may become financially favorable.
What this calculator helps you estimate
This calculator compares the estimated cost of renting to the estimated cost of owning over your expected time horizon, including taxes, insurance, maintenance, appreciation, and opportunity cost.
The rent-versus-buy question isn't just payment versus rent — it includes taxes, insurance, maintenance, expected appreciation, rent inflation, transaction costs, and the return you could have earned on the money you would put into a down payment.
Inputs
Buy vs Rent assumptions
Buying
Renting
Timeline
Results
After 7 years
Interpretation
Under these assumptions, buying may become financially favorable around year 8.
Results are highly sensitive to appreciation, rent growth, and the return you assume on invested cash.
Understand the math
How this calculator works
The rent-versus-buy decision is rarely just 'rent versus mortgage payment.' This calculator weighs the full cost of ownership — taxes, insurance, maintenance, transaction costs, and appreciation — against rent and what you could have earned investing the money you'd otherwise put down.
Worked example
$450,000 home, 20% down ($90,000), 6.5% rate, 30-year term, versus $2,200/month rent rising 3% annually.
- Loan amount = $450,000 − $90,000 = $360,000
- Estimated principal & interest ≈ $2,275.44/month
- Add estimated taxes, insurance, and maintenance (roughly 1.5%–2% of value annually) to reach a full owning cost
- Compare cumulative owning cost (net of appreciation and equity built) against cumulative rent plus invested down-payment growth over your expected time horizon
The calculator finds the year cumulative ownership cost, net of home equity gained, falls below cumulative rent — the estimated break-even year.
How to read your results
Interpretation guidance
- A short time horizon usually favors renting, since transaction costs on a sale are front-loaded.
- Higher expected appreciation or rent inflation shifts the break-even year earlier, favoring buying.
- The opportunity cost of your down payment matters — money invested elsewhere also grows.
- This model uses your assumptions; changing appreciation or rent-growth inputs can meaningfully move the answer.
Deeper answers
More questions about this calculator
Is it better to rent or buy?
It depends on how long you plan to stay, local appreciation and rent trends, and what else you could do with your down payment. This calculator estimates a break-even year based on the assumptions you enter.
What costs does the calculator include?
Mortgage principal and interest, property taxes, insurance, HOA dues, maintenance, buying and selling transaction costs, expected appreciation, rent inflation, and an assumed investment return on the cash you'd otherwise put down.
Does it assume I sell the home at the end of the horizon?
Yes — it estimates net sale proceeds after transaction costs at your chosen time horizon to make the comparison apples-to-apples.
What if I plan to stay only 2–3 years?
Short horizons usually favor renting because closing costs and selling costs on a home are only recovered through several years of appreciation and equity buildup.
Results are estimates for educational purposes only and are not a commitment to lend, loan approval, or official Loan Estimate. Actual rates, payments, costs, taxes, insurance, mortgage insurance, eligibility, and loan terms may vary.
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Answers
Frequently asked questions
Is it better to rent or buy?
It depends on how long you plan to stay, expected appreciation, local rent trends, and what else you could do with the money. This calculator estimates a break-even year based on your assumptions.
What costs does the calculator include?
Mortgage principal and interest, property taxes, insurance, HOA dues, maintenance, transaction costs on purchase and sale, expected appreciation, rent inflation, and an assumed return on the cash you would have invested instead.
Next step
Numbers are helpful. A personalized strategy is better.
Review your scenario with a Vabasso mortgage expert. No pressure, no obligation — just clear guidance for your next move.