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Rent vs Buy Calculator

Compare the long-term cost of renting versus buying a home.

Buying a homeStep 5 of 6

Best for: Use it before a move to decide whether to rent or buy given how long you expect to stay.

Complete guide
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How it's calculated & sources
The Rent vs Buy Calculator uses the standard formula for this calculation. It runs entirely in your browser, so your inputs are never uploaded. Figures are educational estimates, not professional advice — verify important decisions with a qualified expert. Last reviewed June 2026.
Key assumptions
  • Assumed appreciation and rent growth
  • Fixed rate
  • Transaction costs estimated

Free & no sign-up · runs entirely in your browser. Results are estimates for general information, not professional advice — verify important decisions with a qualified expert. Last reviewed June 2026.

How it works

Renting: rent compounded by your annual rent increase. Buying: mortgage + down payment + property tax + maintenance + insurance + selling costs, minus the home value at sale. The renter is also credited with investing the down payment.

Example

$2,000 rent vs a $400,000 home ($80,000 down, 7% / 30 yr): with realistic costs, buying usually wins only after several years.

Frequently asked questions

What costs are included now?+

Rent inflation, property tax, maintenance, insurance, selling costs, and the opportunity cost of investing the down payment — a far more realistic comparison.

Should I always buy?+

Usually not if you'll move within a few years — set 'Years you'll stay' and compare: selling costs plus interest-heavy early payments favor renting on short stays.

Continue your journey

Where people usually head next.

Complete guide

Quick answers

Short, sourced answers to the questions people (and AI assistants) ask most.

What is Rent vs Buy?
A rent-vs-buy calculator compares the long-term cost of renting a home against buying one, so you can see which is cheaper over your expected stay.
Why does Rent vs Buy matter?
It is the income side of any rental return and a major household expense.
How is Rent vs Buy calculated?
It tallies the true cost of buying (down payment, mortgage interest, property tax, insurance, maintenance, and selling costs) minus the equity and appreciation you build, then compares that to renting (rent plus the return you'd earn investing the down payment). The 'break-even' is the number of years after which buying wins.
What is a good rent vs buy?
Transaction costs to buy and later sell often total around 7–10% of the price, so short stays usually favour renting; maintenance is commonly budgeted near 1% of the home's value per year.
What are common rent vs buy mistakes?
Ignoring the opportunity cost of the down payment (what it could earn invested).
When should you use the Rent vs Buy Calculator?
Use it before a move to decide whether to rent or buy given how long you expect to stay.

What is the Rent vs Buy Calculator?

A rent-vs-buy calculator compares the long-term cost of renting a home against buying one, so you can see which is cheaper over your expected stay.

How the Rent vs Buy Calculator works

It tallies the true cost of buying (down payment, mortgage interest, property tax, insurance, maintenance, and selling costs) minus the equity and appreciation you build, then compares that to renting (rent plus the return you'd earn investing the down payment). The 'break-even' is the number of years after which buying wins.

  1. Enter your monthly rent — the amount a tenant pays to occupy a property each month.
  2. Enter your property value — the market price or appraised worth of a property.
  3. Enter your down payment — the cash you pay upfront when buying on finance, reducing the amount you borrow.
  4. Enter your interest rate — the percentage a lender charges you to borrow, or a bank pays you to save, usually quoted per year (per annum).
  5. Read the result, then change any input to compare scenarios instantly — the Rent vs Buy Calculator recalculates as you type.

Understanding the inputs

What each value means, why it matters, and a typical range — so you can fill in the calculator with confidence.

Monthly Rent

The amount a tenant pays to occupy a property each month.

Why it matters:
It is the income side of any rental return and a major household expense.
Typical range:
Often set so annual rent is about 3% to 10% of property value (the gross yield).
How it affects results:
  • Higher: Higher rental income or housing cost.
  • Lower: Lower rental income or housing cost.

Common mistake: Using gross rent and ignoring vacancy, maintenance and management costs.

Property Value

The market price or appraised worth of a property.

Why it matters:
Taxes, yields, loan-to-value and returns are all measured against the value.
Typical range:
Set by the local market.
How it affects results:
  • Higher: Higher taxes and a larger loan needed.
  • Lower: Lower taxes and a smaller loan needed.

Common mistake: Using the original purchase price years later instead of the current market value.

Down Payment

The cash you pay upfront when buying on finance, reducing the amount you borrow.

Why it matters:
A larger down payment shrinks the loan, lowers payments, and can remove mortgage insurance.
Typical range:
10% to 20% of the price for a home; 20% avoids most mortgage insurance.
How it affects results:
  • Higher: Smaller loan and less interest, but more cash needed upfront.
  • Lower: Bigger loan, higher payments, and often mandatory mortgage insurance.

Common mistake: Forgetting that a down payment under 20% usually triggers PMI.

Interest Rate

The percentage a lender charges you to borrow, or a bank pays you to save, usually quoted per year (per annum).

Why it matters:
It is the single biggest driver of how much a loan costs or a deposit earns over time.
Typical range:
3% to 12% per year for most loans; about 6% to 8% is common for home loans.
How it affects results:
  • Higher: More interest paid and bigger payments.
  • Lower: Cheaper borrowing and smaller payments.

Common mistake: Entering a monthly rate where an annual rate is expected (or the reverse).

What impacts results most

  1. 1.
    Home price (High impact)Drives the cost of buying.
  2. 2.
    Monthly rent (High impact)Drives the cost of renting.
  3. 3.
    Interest rate (High impact)Sets the cost of the mortgage.
  4. 4.
    Time horizon (Medium impact)Buying usually wins over longer holds.

Key assumptions

  • Assumed appreciation and rent growth
  • Fixed rate
  • Transaction costs estimated

What's a typical value?

Transaction costs to buy and later sell often total around 7–10% of the price, so short stays usually favour renting; maintenance is commonly budgeted near 1% of the home's value per year.

Price-to-rent ratio guide (price ÷ annual rent)

10Strongly favours buying
15Favours buying
18Borderline
21Favours renting
25Strongly favours renting

Worked example

If buying breaks even at year 6, then staying 3 years favours renting, while staying 10 years favours buying.

Common mistakes to avoid

  • Ignoring the opportunity cost of the down payment (what it could earn invested).
  • Forgetting maintenance, insurance, and the ~6% cost to sell.
  • Assuming home prices only ever rise.

How Mortgage connects to the concepts around it.

EMI:
A fixed monthly loan payment of principal plus interest.
Down Payment:
Upfront cash that reduces the amount you borrow.
Affordability:
The largest home or loan you can comfortably afford.
PMI:
Insurance usually required when the down payment is under 20%.
Amortization:
How each payment splits between interest and principal over time.
Interest Rate:
The annual cost of borrowing or the return on savings.

Loans & Mortgage learning path

A sensible order to learn these concepts.

Reviewed sources & methodology

Methodology: Industry Standard · Last reviewed June 2026.

Keywords: rent, buy, home.

This is an educational estimate, not financial advice. Rates, rules and figures change — verify the latest with the provider or a qualified advisor before you decide.

Sources: U.S. CFPB — Buying a house

Reviewed by the Free Tools Galaxy editorial team · Updated June 2026 · Calculated privately in your browser.

Frequently asked questions

Is the Rent vs Buy Calculator free to use?+

Yes. Every tool on Free Tools Galaxy is 100% free, runs in your browser and requires no signup.

How accurate is the Rent vs Buy Calculator?+

Rent vs Buy Calculator uses the standard rent vs buy formula in double-precision arithmetic, so the same inputs always produce the same result and you can verify any figure by hand. It is an educational estimate — real-world outcomes depend on your actual rates, rules and assumptions.

Do you store my inputs?+

No. The Rent vs Buy Calculator runs entirely in your browser. Nothing is uploaded or saved to a server.

Can I use the Rent vs Buy Calculator on mobile?+

Yes — the interface is fully responsive and works on phones, tablets and desktops.

What are common mistakes to avoid?+

The most frequent mistake is mixing units. Double-check your inputs use a single, consistent unit before clicking Calculate.

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Compare the long-term cost of renting versus buying a home.

Try it: https://freetoolsgalaxy.com/tools/rent-vs-buy
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It covers the standard mortgage use cases (mortgage, home, loan, payment) and links out to the formula + worked examples if you want to learn the math.

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