Deciding whether to rent or buy depends on how long you plan to stay, local market conditions, and ongoing costs. This calculator compares total renting and homeownership costs over a chosen time horizon.
How to use this calculator
- Enter how many years you want to compare.
- Enter the home price, down payment, mortgage rate, and loan term.
- Enter your current monthly rent and expected annual rent increase.
- Enter annual ownership costs as a percentage of home value (maintenance, taxes, insurance).
- Review total rent cost, total buy cost, and the difference.
Formula
Total rent cost sums monthly rent with annual increases over the comparison period. Total buy cost includes down payment, mortgage payments, and annual ownership costs as a percentage of home value. The difference shows which option costs less over the period.
Example
Over 7 years, paying $2,000 rent with 3% annual increases may total about $185,000, while buying a $350,000 home with a $70,000 down payment at 6.5% plus 2% annual ownership costs may total a different amount depending on mortgage payments.
Frequently asked questions
- Does buying build equity?
- Yes, mortgage payments reduce your loan balance and can build equity. This calculator focuses on total out-of-pocket costs rather than resale value or equity gained.
- What ownership costs should I include?
- The ownership cost percentage typically covers property taxes, insurance, maintenance, and repairs. Adjust it to reflect your local market and property type.