Compare the true cost of buying a home versus renting over your stay.
Calculated instantly in your browser.
How is rent vs buy calculated?
Net cost of buying = down payment + purchase costs + mortgage paid + ownership costs − equity recovered at sale, while renting is rent summed over the years with annual increases. Buying subtracts the equity you recover at sale (after 6% sale cost) and adds 2% purchase costs. Renting often wins over short stays; buying wins the longer you stay.
Understanding your result
Buying’s “net cost” subtracts the equity you recover when you sell (after a 6% sale cost) and includes 2% purchase costs. Renting often wins over short stays; buying tends to win the longer you stay.
Formula and method
Net cost of buying = down payment + purchase costs + mortgage paid + ownership costs − equity recovered at sale. Renting = rent summed over the years with annual increases.
Assumptions and limitations
This is an estimate, not financial or professional advice. It relies on assumptions you enter about rent increases, house growth, mortgage rate and costs, all of which are uncertain and may not reflect real markets. Small changes can flip the result, so test several scenarios and consult a professional before deciding.
Worked example
On a 400,000 home with 20% down at 6.5% over a 7-year stay, buying can cost about 29,000 less than renting at 2,000/month.
How to use this tool
- Enter the home price, down payment, mortgage rate and term.
- Enter how long you’ll stay, plus appreciation and ownership costs.
- Enter the monthly rent to compare, then press Compare.
About the Rent vs Buy Calculator
The Rent vs Buy Calculator compares the total net cost of owning a home with the total cost of renting over the period you plan to stay, so you can see which is cheaper.
Who should use this tool
People deciding whether to rent or buy for a given length of stay who want to compare the full net cost of each. Useful when a lower monthly rent tempts you against building equity, and you want to see which option is cheaper over the years you actually plan to live there.
Benefits
- Compares total net cost of buying versus renting
- Includes purchase, ownership and selling costs plus recovered equity
- Shows how length of stay changes the winner
- Runs locally, keeping sensitive figures on your machine
Practical use cases
- Deciding whether to buy for a planned length of stay
- Weighing a low rent against building home equity
- Testing how house-price growth affects the comparison
- Budgeting the true cost of ownership before purchase
Frequently asked questions
Why can buying still cost money even though I build equity?
Interest, taxes, maintenance and transaction costs are real spending. The calculator credits back the equity you recover at sale, but those costs remain.
Does it include closing and selling costs?
Yes — it assumes about 2% to buy and 6% to sell, which are typical, and notes this in the result.
How does length of stay affect whether renting or buying wins?
Buying carries large upfront and selling costs spread across your stay. Over a short period those costs weigh heavily per year, often favouring renting. The longer you stay, the more they are diluted and the more equity you recover, so buying tends to come out cheaper over longer horizons.
What assumptions have the biggest effect on the result?
Rent increases, house-price growth, the mortgage rate and how long you stay all move the outcome significantly. Because these are uncertain, the comparison can shift from one option to the other with modest changes. Running several scenarios shows how robust the answer is rather than relying on a single result.