Rent vs Buy Calculator
See which one really costs you less, and after how many years
Enter the home, the rent, and how long you would stay
Free · No sign-up · Updates as you typeA mortgage payment is two things in one. The part that repays the loan moves money from one pocket you own into another, so it is not really a cost. The interest is gone for good, and so is rent. This compares only the money that never comes back on each side, over the years you actually stay.
$
The price you would actually agree, e.g. 350,000.
$
Rent for a comparable place nearby, e.g. 1,600.
Be honest, e.g. 7. This is the input that decides it.
Share of the price from your own money, e.g. 20 for 20%.
Annual rate on the loan, e.g. 5 for 5%.
How many years to repay the loan, e.g. 30.
Expected annual rise, e.g. 3. Enter 0 to assume none.
% of the home's value each year, e.g. 2.
How fast the rent would rise, e.g. 3.
Yearly return on money not put into the home, e.g. 5.
% of the price for notary, taxes, registration, agent, e.g. 3.
% of the sale price for the agent and paperwork, e.g. 5.
Over 7 years, buying costs you this much less than renting
$9,784
Buying is cheaper
Break-even year
Buying overtakes renting in year 6. Sell before then and renting was the cheaper choice.
In plain words: over 7 years, the money you never get back comes to $107,495 if you rent and $97,711 if you buy. On the buying side, $92,506 goes to the bank as interest, $53,637 goes on property tax, insurance and upkeep, and $32,023 goes on the one-off fees of buying and selling. Against that, the home is worth $80,456 more by the time you sell. On the renting side, $147,119 goes on rent. Against that, the $80,500 you never had to hand over as deposit and fees earns $32,772 while it stays invested at 5.0%. Month by month, renting also leaves cash spare next to owning, and investing that difference adds another $6,853. The $33,754 you repaid off the loan is not counted as a cost anywhere above: that money moved from your account into the home and came back to you at the sale.
Net Cost of Buying
$97,711
Net Cost of Renting
$107,495
Monthly cost of owning, at the start
$2,086
Monthly rent, at the start
$1,600
Where the money actually goes
Only unrecoverable money is on this list. Repaying the loan is not, because that money stays yours.
| Item | Amount |
|---|---|
| Buying | |
| Mortgage interest paid to the bank | $92,506 |
| Property tax, insurance, upkeep, service charge | $53,637 |
| Fees to buy (notary, taxes, registration, agent) | $10,500 |
| Fees to sell (agent, paperwork) | $21,523 |
| Less the rise in the home's value | -$80,456 |
| What buying costs you for good | $97,711 |
| Renting | |
| Rent paid | $147,119 |
| Less the growth on the deposit and fees never handed over | -$32,772 |
| Less the growth on cash renting leaves spare each month | -$6,853 |
| What renting costs you for good | $107,495 |
How long you stay changes the answer
Same home, same rent, same loan. Only the number of years changes. The fees of buying and selling are two lumps spread over however many years you own the place, so a short stay carries them almost alone.
| If you stay | Buying costs | Renting costs | Cheaper |
|---|---|---|---|
| 1 year | $38,931 | $15,042 | Rent |
| 2 years | $49,562 | $30,169 | Rent |
| 3 years | $59,878 | $45,392 | Rent |
| 5 years | $79,512 | $76,174 | Rent |
| 7 years (yours) | $97,711 | $107,495 | Buy |
| 10 years | $122,025 | $155,755 | Buy |
| 15 years | $153,292 | $240,834 | Buy |
| 20 years | $169,324 | $333,108 | Buy |
| 25 years | $162,401 | $432,294 | Buy |
| 30 years | $121,777 | $537,341 | Buy |
Insight: The fees of buying and selling do not care how long you stay, so they weigh on every year you own the place. That is why the honest question is never whether to buy, but how many years this particular purchase needs before it beats renting the same home.
Read the method in full: rent vs buy, the math that actually decides it
This tool compares only the money that never comes back on each side, over the years you say you will stay. For the owner that is mortgage interest, property tax, insurance, maintenance and any service charge, plus the one-off fees of buying and of selling, less whatever the home has gained in value by the time it is sold. The part of each mortgage payment that repays the loan is deliberately left out, because it moves money from a bank account into the home and returns at the sale. For the renter it is the rent, less the growth on the deposit and buying fees a renter never has to hand over, and less the growth on whatever the cheaper monthly option leaves spare each month, invested at the return you set.
Step 1: Enter the price of the home you would buy and the rent for a similar place in the same area.
Step 2: Say honestly how many years you expect to stay, then set your deposit, rate and mortgage length.
Step 3: Open "Adjust the assumptions" and put in the fees, taxes and rent rises that apply where you live. The defaults are only a starting point.
Step 4: Read the break-even year and the table of years. If you would sell before that year, renting is the cheaper choice.
Should You Rent or Buy?
The rent-versus-buy question rarely has a one-line answer, because it depends on numbers that vary hugely by person and place: how long you will stay, the price of the home relative to local rents, the mortgage rate, and what return you could earn by investing instead of buying. The popular belief that renting is "throwing money away" ignores the large, often invisible costs of owning, interest, maintenance, property tax, and the transaction costs of buying and selling.
A fair comparison looks at the total cost of each path over the years you actually plan to stay, not the monthly payment alone. This calculator does exactly that: it nets off the equity a buyer builds and the proceeds of an eventual sale, and it credits a renter with the investment growth on the deposit they never had to pay. The option with the lower net cost over your horizon is the financially better choice.
A Mortgage Payment Is Two Things in One
Setting a rent payment beside a mortgage payment and declaring the mortgage the winner is the most common mistake in this whole decision, and it is broken before it starts. One part of that payment repays the loan. That money does not vanish: it moves from a bank account into the home, from one pocket you own into another, and you are neither richer nor poorer for the transfer. The other part is interest, and interest goes to the bank and never comes back. Rent is entirely of the second kind. Comparing pure cost on one side against cost plus saving on the other guarantees the wrong answer.
You do not have to estimate the split. The repayment schedule your bank hands over separates interest from capital, instalment by instalment, and in the early years of a long loan the interest column is usually the heavier of the two. That is the figure this calculator counts, alongside property tax, insurance, maintenance and the one-off fees at each end. For the longer version of the argument, with what changes from one country to the next, read rent vs buy: the math that actually decides it.
Time Is the Decisive Factor
The single biggest driver of the answer is how long you stay. Buying carries heavy one-off costs, the deposit, purchase fees and the cost of selling later, that only pay off when spread over enough years. There is usually a break-even point: stay longer than it and buying wins, sell sooner and renting and investing the difference comes out ahead. Because life plans change, it is worth being honest about your real time horizon and testing a few scenarios rather than assuming you will stay forever.
Beyond the Numbers
A calculator captures the financial side, but the decision is not purely financial. Owning offers stability, freedom to renovate, and protection from rent rises; renting offers flexibility, lower maintenance responsibility, and the ability to keep capital invested and diversified rather than concentrated in a single property. For internationally mobile people in particular, the flexibility of renting and a diversified portfolio can outweigh a modest financial edge from buying. Use the number as one important input, alongside your plans and priorities.
Related Calculators
The money a renter keeps invested is the heart of this comparison, model its growth with the compound interest calculator. And to make sure either choice fits your monthly budget, use the 50/30/20 budget calculator.
Frequently Asked Questions
There is no universal answer, it depends on how long you stay, local prices and rents, mortgage rates, and the return you could earn by investing instead. As a rule of thumb, the longer you stay, the more buying tends to win, because the large one-off transaction costs are spread over more years and you build equity. For short stays, renting and investing the difference often comes out ahead. This calculator compares the total cost of each path over the period you expect to stay.
No, and that is the whole point. A mortgage payment is two things in one envelope. The interest goes to the bank and never comes back, so it is a real cost. The rest repays the loan, which moves money out of your bank account and into the home, and you get it back when you sell. Counting the full payment against rent is the mistake that makes buying look better than it is, so this tool counts only the interest, alongside the running costs and the fees of buying and selling.
Far more than the mortgage payment: an upfront down payment and purchase costs (legal fees, taxes, surveys), ongoing property tax, maintenance and insurance, and selling costs when you move on. Against these you build equity as you repay the loan and if the home appreciates. A fair comparison with renting counts all of these, plus the opportunity cost of the money tied up in the deposit, which this calculator does.
Because a renter does not pay a large down payment, so that money can be invested instead. To compare fairly, the calculator credits renting with the growth the down payment and purchase costs would earn if invested over the same period. This opportunity cost is the most commonly overlooked part of the decision, and it is often what tips the balance for shorter time horizons.
See Property in Your Whole Financial Picture
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