Is it better to rent or buy right now?

It depends on your time horizon, local prices and rents, mortgage rates, and what you could earn by investing your cash if you rent. Our calculator compares ending wealth for both paths so you can see the trade-offs.

How do extra costs like taxes and maintenance factor in?

Property taxes, insurance, maintenance, HOA dues, and PMI are modeled on the buy side. Renter’s insurance and rent inflation are modeled on the rent side. The tool then compares the owner’s equity after selling with the renter’s invested portfolio.

What is a price-to-rent ratio and why does it matter?

The price-to-rent ratio compares a home’s price to the annual rent for a similar home. Higher ratios tend to favor renting; lower ratios can favor buying—especially if you plan to stay long enough to spread buying and selling costs.

Do bi-weekly payments or extra principal payments change this decision?

Accelerating mortgage payoff usually improves the buy case because you pay less interest and build equity faster. But it also ties up cash you might otherwise invest; compare outcomes using consistent assumptions.

Will the results match my lender’s payoff or escrow exactly?

Results are estimates for planning. Actual payoff quotes, escrow requirements, and taxes vary by lender and jurisdiction. For binding numbers, request official statements from your lender or tax authority.

Rent or Buy Mortgage Calculator

Wondering if it’s smarter to keep renting or buy a home? Our free calculator helps you compare the total costs of renting versus buying, factoring in all the hidden details. Enter the details below to compare the full economics of renting and buying—upfront cash, monthly costs, long-term net worth, and a break-even timeline.

Purchase & Mortgage

Home purchase price

Down payment

Loan interest rate (APR)

Loan term (years)

Closing costs (buying)

Property tax rate (annual)

Homeowners insurance (mo)

PMI rate (annual)

HOA dues (mo)

Maintenance/renovations (mo)

Rent & Investment

Current monthly rent

Renter’s insurance (mo)

Rent increase (annual)

Security deposit (refundable)

Broker’s fee (upfront)

Investment return (annual)

We assume any monthly savings from renting vs. owning is invested at this same rate.

Market & Horizon

Home value appreciation (annual)

Inflation (annual)

Time horizon (years)

Selling costs (of price)

Income tax rate

Include tax effects

Tax modeling is simplified: we apply your marginal rate to mortgage interest only.

Recommendation: Buy is ahead by $26,104 after 7 years. (Break-even around month 36.)

Buy – Summary

Upfront cash needed$99,000
Month 1 total (est.)$2,627
Ending home equity$227,945
Net proceeds if sold at horizon$194,738
Net worth after 7 yrs$185,738

Rent – Summary

Upfront cash needed$2,200
Month 1 total (est.)$2,220
Investment balance at horizon$157,434
Deposit refunded at horizon$2,200
Net worth after 7 yrs$159,634

Cumulative Net Worth Over Time

Loading chart…

View year-by-year breakdown

Year	Buy: Est. Monthly (yr-end)	Rent: Est. Monthly (yr-end)	Buy: Equity (yr-end)	Rent: Investments (yr-end)	Net Worth – Buy	Net Worth – Rent
1	$2,654	$2,301	$107,524	$106,454	$98,524	$108,654
2	$2,683	$2,393	$125,722	$115,841	$116,722	$118,041
3	$2,713	$2,488	$144,625	$124,918	$135,625	$127,118
4	$2,744	$2,587	$164,265	$133,633	$155,265	$135,833
5	$2,776	$2,690	$184,674	$141,935	$175,674	$144,135
6	$2,809	$2,798	$205,888	$149,766	$196,888	$151,966
7	$2,844	$2,909	$227,945	$157,434	$218,945	$159,634

Estimates only. Property taxes track home value. PMI ends when the loan balance drops to 80% of the original value. Tax effects modeled as marginal rate × interest.

Rent or Buy—What Really Wins?

The rent vs buy decision isn’t just about a monthly payment. Buying has upfront and selling costs, ongoing expenses (taxes, insurance, maintenance, HOA, and sometimes PMI), and the potential for home price appreciation. Renting frees cash that you could invest elsewhere.

This tool compares the full economics of renting and buying over your chosen time horizon. It goes beyond a simple payment check: we estimate upfront cash, monthly cash flow, home equity, investment growth (opportunity cost), potential tax effects, selling costs, and a projected break-even point. You’ll also see a side-by-side summary and a cumulative net-worth chart.

How to Use the Calculator

Enter a home price and your planned down payment. Add your interest rate, loan term, and realistic closing costs.
Add ongoing owner costs: property tax rate, homeowners insurance, optional PMI, HOA dues, and maintenance.
Enter a comparable monthly rent, renter’s insurance, and expected rent increases. Include a security deposit and any broker fee.
Set market assumptions: home appreciation, inflation, your time horizon, optional tax rate (to model mortgage-interest savings), selling costs, and an investment return to capture the opportunity cost of cash you might invest if you rent.
Review the Recommendation, the break-even timing, the side-by-side summary, and the cumulative net-worth chart.

Tip: Run a few scenarios (optimistic, base case, conservative) to understand sensitivity.

Inputs explained

Purchase & mortgage

Home purchase price: Target price of the home.
Down payment: Cash you’ll put down up front.
Interest rate (APR) & loan term: Used to compute your principal & interest.
Closing costs (buying): Lender, title, and other fees due at closing.
Property tax rate: Annual tax as a % of home value (estimated monthly).
Homeowners insurance: Monthly premium estimate.
PMI rate: Private mortgage insurance until ~80% LTV, if down payment < 20%.
HOA dues: Monthly association fees (if applicable).
Maintenance/renovations: Ongoing upkeep set as a monthly estimate.

Rent & investment

Current monthly rent & renter’s insurance.
Rent increase (annual): Estimated yearly rent growth.
Security deposit & broker’s fee: Upfront rental cash (deposit is treated as refundable asset).
Investment return (annual): Expected return on cash that can be invested if you rent (down payment, closing costs, or ongoing monthly savings).

Market & horizon

Upfront cash: Compares down payment + closing costs (buy) vs. deposit and fees (rent).
Month 1 totals: Estimated first-month cash outlay for each path.
Investment return: What you expect to earn by investing the down payment and any monthly savings if you rent.Cumulative net worth: For buying, we track equity growth and net proceeds after selling (less selling costs and any remaining balance). For renting, we grow the invested cash and add back the refundable deposit.
Break-even month: The first point (if any within your horizon) where buying’s modeled net worth catches up to renting’s.

Understanding Your Results

Upfront cash: Compares down payment + closing costs (buy) vs. deposit and fees (rent).
Month 1 totals: Estimated first-month cash outlay for each path.
Cumulative net worth: For buying, we track equity growth and net proceeds after selling (less selling costs and any remaining balance). For renting, we grow the invested cash and add back the refundable deposit.
Break-even month: The first point (if any within your horizon) where buying’s modeled net worth catches up to renting’s.
Recommendation: A plain-English verdict showing which side is ahead and by how much at the end of your horizon.

Results are planning estimates. For binding payoff figures, taxes, and escrow, contact your lender, tax assessor, or insurance carrier.

Key factors when deciding to rent or buy

Financial considerations

Price-to-rent ratio: As a rule of thumb, if a home costs far more than comparable annual rent (e.g., 20×+), renting may be more cost-effective—unless appreciation or lifestyle benefits justify the premium.
Down payment & liquidity: A larger down payment can reduce PMI and interest, but it also ties up cash you might invest elsewhere.
Opportunity cost: The calculator models the investment growth of cash not used to buy. This can materially tilt results.
Time horizon: Buying typically makes more sense the longer you stay, because closing/selling costs are spread over more years.
Taxes: Mortgage-interest deductibility depends on your filing status, itemizing, and current tax law. We model this simply via a marginal rate × interest.

Location & lifestyle

Flexibility: Renting makes it easier to move for work, school, or family needs.
Customization: Homeowners control renovations and long-term comfort upgrades.
Market conditions: Rates, inventory, and local price trends (appreciation) matter—use realistic inputs.

Market conditions

Mortgage rates and availability.
Inventory and price trends in your target neighborhoods.
Rent growth dynamics and concessions.

Tips & common strategies

Run multiple scenarios: Try a higher rent growth, a lower appreciation path, or a different horizon to see sensitivity.
Plan for maintenance: Setting aside 1%–2% of home value per year is a common rule of thumb (your monthly input approximates this).
Watch PMI: If you buy with <20% down, PMI ends around 80% LTV in our model—this can change your break-even timing.
Consider cash reserves: Keep an emergency fund even after closing; liquidity matters.

Frequently Asked Questions

Is it a good idea to buy with less than 20% down?

It can be—especially for long horizons in appreciating areas—but budget for PMI and ensure you keep an adequate emergency fund.

Does renting always mean “throwing money away”?

No. Renting can be financially smart if it lets you invest cash at attractive returns, avoid high buying/selling costs, or maintain flexibility.

How long should I plan to stay before buying makes sense?

There’s no universal number, but many markets need ~5–7 years to overcome transaction costs. Use the break-even output as a guide.

Are tax effects included?

This model focuses on cash flows and wealth. Tax results vary widely by filer and location—consult a tax pro for personalized guidance.