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Rent Vs Buy

The rent vs buy decision is not just about monthly payments — it involves opportunity cost on the down payment, transaction costs on both sides, property appreciation, maintenance, tax deductions, and your own mobility needs. Our calculator runs a full 5–10 year comparison so you can see when (and whether) buying ever comes out ahead in your specific market.

Buy Option

Rent Option

Time Horizon

Recommendation

Saves $

Buy Total Cost:$
Rent Total Cost:$
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Real Estate

About the Rent vs Buy Calculator

The rent vs buy decision is not just about monthly payments — it involves opportunity cost on the down payment, transaction costs on both sides, property appreciation, maintenance, tax deductions, and your own mobility needs. Our calculator runs a full 5–10 year comparison so you can see when (and whether) buying ever comes out ahead in your specific market.

How to use it

  1. Enter the home price, down payment, mortgage rate, and term.
  2. Enter rent, annual rent increase, and investment return you could earn on the down payment.
  3. Enter estimated maintenance (1–2% of home value annually), insurance, and property tax.
  4. Set the time horizon. See the break-even year and total cost of each option.

Formula & methodology

Buy cost = Mortgage payments + Property tax + Maintenance + Insurance + Transaction costs − Tax deductions − Equity built + Opportunity cost of down payment. Rent cost = Rent × months + Foregone equity. Net advantage of buying = Rent cost − Buy cost over horizon.

Common use cases

  • Deciding between renting and buying in a high-price city
  • Understanding how long you need to stay to make buying worthwhile
  • Comparing the investment return of down payment in stocks vs home equity
  • Modeling a specific property against renting a comparable unit
  • Advising a first-time buyer on whether now is the right time

Frequently asked questions

Price-to-rent ratio = Home price ÷ Annual rent for a comparable home. Below 15: buying is generally favorable. 15–20: borderline. Above 20: renting and investing the difference often wins financially. San Francisco, NYC, and Seattle often exceed 30.
Not necessarily. Appreciation below the stock market return means the opportunity cost of tying up a down payment in home equity outweighs the equity gain. In many high-price markets, renters who invest the difference outperform buyers over 10-year horizons.

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