keencalculator
  1. Home
  2. Finance & Loans
  3. Rent vs Buy Calculator

Rent vs Buy Calculator

Compare the true cost of renting and buying over the years you expect to stay. Enter the home price, down payment, mortgage rate, rent and growth assumptions; the calculator counts interest, property tax, insurance, upkeep, buying and selling costs and the investment growth you give up, then tells you which costs less and when buying pulls ahead.

Quick examples
$
%
%
years
$
%
%
%

What the down payment and any monthly savings would earn if invested instead.

Your numbers stay in your browser. They are never uploaded.
Over your time in the homeRenting costs less
Difference
$22,369.55
Net cost of buying
$224,658.55
Net cost of renting
$202,289.00
Buying pulls ahead after
12 years
Cash from selling the home
$173,100.59
Owning cost in the first month
$2,872.62
Mortgage interest
$139,231.87
Property tax
$34,175.94
Insurance, maintenance, HOA and PMI
$43,669.03
Buying and selling costs
$41,516.97
Investment growth given up
$58,014.29
Rise in the home’s value
$91,949.55
Costs of buying you do not get back (before the home’s rise in value)
  • Interest
  • Property tax
  • Upkeep
  • Buying and selling
  • Lost growth

Year by year

YearRent that yearOwning costs that yearCash if you sellBuying ahead by

Saved setups

Save a set of inputs you reuse — your usual rate, your loan, your room sizes — and load it back in one tap.

    Your recent calculations

    Results you calculate here are kept on this device so you can come back to them.

      Also free on iPhone and Mac

      Formula

      Net cost of buying = interest + property tax + insurance, upkeep, HOA and PMI + closing and selling costs + investment growth given up − rise in the home’s value
      Net cost of renting = rent paid + investment growth given up in months when renting costs more than owning
      Each month both households spend the same: whoever’s housing costs less invests the difference, and the renter invests the down payment and closing costs
      Buying wins when its net cost is lower; the break-even year is the first year it is

      How to use it

      1. Enter the price of the home and the rent for a comparable place.
      2. Enter your down payment, mortgage rate and term.
      3. Set how long you plan to stay and the growth rates for home prices, rent and investments.
      4. Open the extra costs to adjust property tax, insurance, maintenance, HOA, PMI and transaction costs, then read the verdict and the year-by-year table.

      Worked examples

      A $400,000 home with 20% down at 6.5% versus $2,200 rent, staying 7 years, with 3% price and rent growth and a 6% return

      Over your time in the home
      Renting costs less
      Difference
      $22,369.55
      Net cost of buying
      $224,658.55
      Net cost of renting
      $202,289.00
      Buying pulls ahead after
      12 years
      Cash from selling the home
      $173,100.59
      Owning cost in the first month
      $2,872.62
      Mortgage interest
      $139,231.87
      Buying and selling costs
      $41,516.97
      Investment growth given up
      $58,014.29
      Rise in the home’s value
      $91,949.55

      A $300,000 home bought outright for one year versus $2,000 rent, with no growth or returns — checkable by hand

      Over your time in the home
      Renting costs less
      Difference
      $10,200.00
      Net cost of buying
      $34,200.00
      Net cost of renting
      $24,000.00
      Buying pulls ahead after
      2 years
      Cash from selling the home
      $282,000.00
      Owning cost in the first month
      $600.00
      Property tax
      $3,000.00
      Insurance, maintenance, HOA and PMI
      $4,200.00
      Buying and selling costs
      $27,000.00
      Investment growth given up
      $0.00

      A $350,000 home with 10% down and PMI versus $1,800 rent, staying 10 years with 4% price growth

      Over your time in the home
      Renting costs less
      Difference
      $17,670.44
      Net cost of renting
      $247,619.79
      Buying pulls ahead after
      15 years
      Cash from selling the home
      $219,955.57
      Owning cost in the first month
      $2,888.93
      Mortgage interest
      $190,966.51

      Rules of thumb

      The 5% rule, popularized by Ben Felix, estimates the yearly unrecoverable cost of owning at about 5% of the home’s value — roughly 1% property tax, 1% maintenance and 3% cost of capital. For a $400,000 home that is $20,000 a year, or $1,667 a month; if comparable rent is lower, renting is likely cheaper.

      Time matters most. Buying and selling costs — often 8–10% of the price combined — take years of appreciation and loan paydown to recover. With the default inputs, renting is $22,369.55 cheaper over 7 years, but buying pulls ahead after 12 years and is $23,355.04 cheaper over 15.

      What this leaves out

      It ignores income taxes: the US mortgage interest deduction helps only if you itemize, investment gains are usually taxable, and a home sale gain of up to $250,000 ($500,000 for married couples filing jointly) is generally tax-free if you owned and lived in the home for two of the last five years. Insurance and HOA dues are held flat while tax and maintenance rise with the home’s value. Small changes in appreciation or investment return can flip the answer, so try a few. This is an estimate, not financial advice.

      Questions people ask

      Is it better to rent or buy?

      It depends mostly on how long you stay. For a $400,000 home with 20% down at 6.5% against $2,200 rent, with 3% growth in prices and rent and a 6% investment return, renting costs $22,369.55 less over 7 years; buying pulls ahead after 12 years.

      How long do I need to stay for buying to make sense?

      Until the break-even year shown. In the default example it is 12 years; if your savings would only earn 4% instead of 6%, it drops to 8 years.

      What does opportunity cost mean when buying a house?

      The growth your down payment and closing costs would have earned if invested. In the default example, the $92,000 paid up front plus the higher monthly costs of owning would have grown by $58,014.29 over 7 years.

      Related calculators

      Mortgage CalculatorFull monthly house payment: principal, interest, taxes, insurance, PMI and HOA.Home Affordability CalculatorThe home price your income, debts and down payment can support.Down Payment CalculatorDown payment, closing costs, cash to close and how long to save for it.Investment CalculatorProject an investment with monthly contributions, returns and inflation.Rental Yield CalculatorGross and net rental yield on a buy-to-let property.Inflation CalculatorWhat today’s prices become, and what today’s money will buy, after inflation.