Rent vs Buy Calculator
Buy a home, or rent and invest the difference? Compare where each path leaves your net worth, year by year, and find the year buying pulls ahead.
Buy Rent & invest · years 1–30
How the comparison works
Both households start with the same cash. The buyer spends it on the down payment and closing costs; the renter invests it. Each month, whichever path is cheaper invests the difference at your chosen return. That makes the result a fair apples-to-apples comparison of net worth, not just of monthly payments.
The two numbers that move the answer most are how long you stay (buying and selling costs need years to recover) and the gap between home appreciation and investment return. Try setting appreciation equal to rent growth and a stock return of 6–7% to see a neutral case.
Thinking of keeping the home as a rental when you move? Run it through the rental property calculator.
Questions investors ask
Is it better to rent or buy?
It depends on how long you stay, the price-to-rent ratio where you live, mortgage rates and what your down payment would earn if invested instead. Buying usually wins over long stays because of loan paydown and appreciation; renting often wins over short stays because buying and selling costs eat the gains.
How does this rent vs buy calculator work?
It compares two paths over the same years. The buyer pays the down payment and closing costs, then mortgage, tax, insurance and maintenance. The renter invests the down payment and closing costs, plus any month where renting is cheaper, at your investment return. At the end it compares the buyer’s home equity after selling costs with the renter’s portfolio.
What is the price-to-rent ratio?
Home price ÷ annual rent for a similar home. Below about 15 buying tends to look favourable; above about 20 renting often does. It is a rough screen that ignores interest rates and taxes.
Does this include tax benefits?
No. Since the 2017 tax law raised the standard deduction, most US homeowners no longer itemize, so the mortgage-interest deduction is often worth little. Leaving it out keeps the comparison conservative for buying.