Rent vs. buy calculator
Buying costs more than the mortgage payment, but part of each payment builds equity and the home may appreciate. This calculator compares your rent with the full monthly cost of owning, then shows the equity and net position after the years you choose.
Educational estimate based on the numbers you enter and common rules of thumb. Not a loan offer, rate quote, approval or financial advice. A licensed loan officer can run your real numbers.
How this calculator works
This calculator compares two paths over the number of years you choose. On the renting side, it adds up your rent and raises it once a year by the rent increase you enter. On the buying side, it finds the principal and interest payment on a 30-year fixed loan for the price minus your down payment, at the rate you enter. Enter the rate from your own quote or Loan Estimate; the field starts empty. Yearly property tax, maintenance and insurance are added, and those costs grow each year with the home value growth you enter.
At the end, the home's value is the price grown by your home value growth each year. Equity is that value minus selling costs, minus the loan balance still owed. The net cost of owning is everything you paid, plus your down payment and a built-in estimate for buying closing costs, minus that equity. The tool compares this with total rent to show which path comes out ahead.
Limits to know. The loan term is fixed at 30 years. The year-one monthly cost includes a rough mortgage insurance estimate when the down payment is small, but the multi-year totals do not include mortgage insurance. Tax effects, HOA dues and renter's insurance are left out, and so is what your down payment could earn if you invested it instead.
When you apply to buy, a lender looks at the full monthly housing payment, not the rent comparison, and checks it against your income and debts. The money for your down payment, closing costs and reserves is verified too.
Example: enter $2,500 of monthly rent, a $450,000 home price and a 7-year stay. Then try 3 years and 10 years to see how the length of your stay changes the result.
Related: Mortgage payment calculator · Home affordability calculator · Down payment goal planner · Which home loan is right for me?
Common questions
Is buying always better than renting?
No. Over short periods, closing and selling costs can outweigh the equity you build. The longer you stay, the more buying tends to help, but it depends on prices, rates, rents and how values change.
Why include maintenance?
Owners pay for repairs and upkeep that a landlord would cover. A common planning assumption is about 1 percent of the home's value per year, though older homes can need more.
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