Rent vs Buy Calculator — True Cost Comparison | money-calc.com
Free rent vs buy calculator with break-even analysis. Compares total lifetime cost including mortgage, taxes, maintenance, opportunity cost, and home appreciation over any time horizon.
Equity changes everything
Rent is a pure cost; a mortgage payment is part cost, part forced saving. The calculator credits the buyer with equity — the appreciated home value minus the remaining loan — and debits the opportunity cost of tying up the down payment that could have been invested elsewhere. Comparing those adjusted totals year by year is what produces a meaningful break-even, rather than just comparing a rent check to a mortgage check.
Worked example with hypothetical inputs
A $400,000 home with 20% down ($80,000), a 6.5% 30-year mortgage ($2,022.62 per month on $320,000), 1.2% property tax, 1% maintenance, $100 HOA, 2% appreciation, and a 7% opportunity rate — versus $2,000 rent rising 3% yearly. Buying breaks even in year 13. Nudge appreciation or rent growth and the answer moves by years, which is exactly what the chart is for. Informational only.
How to Use
- Home Details — Enter the home price, down payment percentage, mortgage rate, and loan term
- Ongoing Buy Costs — Enter the annual property tax rate, maintenance as a % of home value, monthly HOA fee, and expected appreciation rate
- Rent Details — Enter the current monthly rent and the annual rent increase rate
- Comparison Settings — Set how many years to compare and the opportunity-cost rate your down payment could otherwise earn
- Calculate — Click Calculate to see cumulative buy and rent costs and the chart of both curves
- Find the Break-Even Year — The tool scans up to 30 years for the first year buying becomes cheaper than renting
FAQ
What is the opportunity cost of a down payment?
Money used for a down payment could instead be invested. The opportunity cost rate estimates what that money would have earned — typically 7% for a diversified stock portfolio. This is subtracted from buy costs.
Why might buying be more expensive in the short term?
Early mortgage payments are mostly interest, and transaction costs are high. In the first few years, total buy costs often exceed total rent costs. The break-even year shows when buying becomes cheaper.
Does home appreciation always make buying better?
Higher appreciation reduces the net cost of buying by growing your equity. But it is not guaranteed. The calculator lets you adjust appreciation rate to test pessimistic and optimistic scenarios.
How is the total cost of buying calculated?
Down payment + mortgage payments + property tax + maintenance + HOA + the opportunity cost of the down payment, minus your equity at sale — the appreciated home value less the remaining loan balance. Equity is what makes buying win in the long run.
What does the break-even year mean exactly?
It is the first year, scanning 1 through 30, where the cumulative cost of buying drops to or below the cumulative cost of renting. If buying never catches up within 30 years, no break-even is reported.
Is rent assumed to stay flat?
No — rent escalates by your chosen rate every year and the increases compound. At a 3% increase, $2,000 rent reaches about $2,610 in the tenth year, which is a major reason long horizons tend to favor buying.