Rent vs Buy Calculator
Compare the true cost of renting versus buying a home over time.
Buying Costs
= $80,000.00
Renting Costs
Comparison Settings
Return on down payment if renting instead
Understanding Rent vs Buy
Hidden Costs of Homeownership
Beyond mortgage payments, homeowners face property taxes, insurance, HOA fees, maintenance (typically 1-2% of home value annually), and repair costs. Many first-time buyers underestimate these expenses, which can add thousands per year.
Opportunity Cost of Down Payment
A $80,000 down payment (20% on $400K home) invested at 7% could grow to over $157,000 in 10 years. When comparing rent vs buy, consider what that capital could earn if invested in stocks or other assets instead of being locked in home equity.
When Renting Makes More Sense
Renting often makes financial sense if you plan to move within 5 years, if the local housing market is overpriced relative to rents, if you want flexibility, or if you can invest the difference wisely. The "5-year rule" exists because closing costs and transaction fees make short-term ownership expensive.
When Buying Makes More Sense
Buying often wins if you plan to stay 7+ years, if rents are high relative to home prices, if you want stability and predictable housing costs, or if you value the ability to customize your home. Forced savings through mortgage payments can also benefit those who might not otherwise invest.
Learn More: CFPB's Home Buying Guide
This calculator provides estimates for educational purposes only. Actual costs will vary based on location, market conditions, and personal circumstances.