Rent vs Buy Calculator
Deciding whether to rent or buy is one of the biggest money choices you'll make. This calculator estimates your monthly mortgage payment plus ownership costs and compares it to renting so you can see the true cost difference.
How it works
This tool calculates your monthly mortgage payment using the standard amortization formula: M = P · r / (1 − (1 + r)^−n), where P is the loan amount (price minus down payment), r is the monthly interest rate, and n is the number of monthly payments.
It then adds estimated ownership costs — property tax (about 1.15% of value per year), homeowners insurance (about 0.35%), and maintenance (about 1%) — to give a fuller monthly cost of buying. That total is compared against your monthly rent.
The comparison shows monthly cash flow only. It does not include rent increases, home appreciation, equity buildup, or tax deductions, all of which can shift the long-term picture toward buying.
Tips
Adjust the tax, insurance, and maintenance assumptions in your head for your area — they vary widely by location and home age.
Remember that part of your mortgage payment builds equity, while rent does not. Buying often looks more favorable the longer you stay in the home.
FAQ
Does buying include building equity?
This calculator compares monthly out-of-pocket cost only. A portion of your mortgage payment goes toward principal (equity), so buying may be more attractive over time even if the monthly cost is higher.
What costs are estimated automatically?
Property tax (~1.15%/yr), insurance (~0.35%/yr), and maintenance (~1%/yr) are estimated as a share of home value. Your actual costs may differ, so treat these as starting assumptions.
Why is renting sometimes cheaper monthly but worse long-term?
Renting often has a lower monthly cost but builds no equity and is subject to rent increases. Buying can cost more upfront yet grow your net worth through equity and potential appreciation.