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Rent vs. buy

Rent vs Buy Calculator: Should You Rent or Buy?

Compare the net worth you could build by buying a home versus renting and investing the money you don't spend, based on your own numbers: price, rent, savings, costs and how long you'll stay.

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Home details

$
$/mo

What you'd pay in rent for a home similar to the one you'd buy.

The result can change a lot depending on how long you stay.

If you buy

$

The money you already have saved, whether or not you use all of it to buy.

20% of $350,000 = $70,000

$

Taxes, title, recording, escrow and appraisal fees. We default to about 3% of the price; adjust it to your case.

If you buy: down payment + closing costs
$80,500
You invest that same money instead
$80,500

$70,000 down payment + $10,500 in closing costs.

Monthly estimate (HOA, insurance, property tax and maintenance)
$300/mo

Default estimate. If you know the real figures, open this and adjust them.

$/mo
$/mo
$/yr
$/yr

If you rent, do you invest that money?

If you don't buy, that money (the down payment and closing costs you save) can be invested — for example in an index fund or ETF — instead of sitting idle.

Starting capital you invest
$80,500
Monthly difference (buy − rent)
$0/mo

%

For example, the average expected return of a diversified fund or ETF. It's applied to the starting capital and, every month, to the difference between the cost of buying and renting.

Not sure which numbers to use? Pick a scenario

One click sets the home appreciation rate, rent growth and investment return. These are assumptions, not predictions — you can still fine-tune each value by hand in "Advanced settings".

Financing

Paying cash? Set the down payment to 100% of the price: the financed amount and payment will drop to $0.

Approximate amount financed
$280,000
%
years
Estimated monthly payment
$1,770

Price appreciation and selling

An assumption for the calculation, not a prediction — prices can also fall.

%

Selling a home comes with costs (agent commission, closing fees...). Applied only when calculating the net worth of buying.

If you rent

Your result

With your numbers, both options come out about the same
$0

In this scenario, both options would build up similar net worth.

Monthly cost of buying
$0
Monthly rent
$0
Monthly difference (buy − rent)
$0/mo

Where does the monthly cost of buying come from?
Mortgage payment
$0
6.5% APR, 30-year term
Home costs
$0
HOA, insurance, property tax and maintenance

Adjust the interest rate, term or home costs in "Advanced settings" on the left.

See the full breakdown
🏠 Buy
$0
Estimated net worth
🏘️ Rent + invest
$0
Estimated net worth
⚖️ Break-even point
Enter your numbers to calculate it.
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All the math happens in your browser. No data is ever sent to a server.

Net worth over time

How your net worth evolves

Hover (or tap on mobile) over the chart to see the detail for each year.

The interactive chart requires JavaScript. The table in "See year-by-year evolution" shows the same data.

Buy Rent + invest

Year-by-year detail

See year-by-year evolution

Based on the calculator's current values. Scroll horizontally on mobile if needed.

Show full table
Year Buy Rent + invest Difference
Figures rounded to the nearest dollar.

Guide

Is it better to rent or buy?

There's no universal answer. It depends on your financial situation, your time horizon, home prices and rents in your area, the financing terms you can get, the costs of buying and owning, your ability to save, and the alternative return you could get by investing that money instead. This calculator compares the estimated net worth of both scenarios using your own numbers, instead of giving you a generic answer.

Key factors

When can each option pay off?

🏠 Buying tends to pay off more if...

You'll live in the home for many years, you have enough savings, you can get good financing, the price is reasonable relative to local rents, and you can comfortably cover the costs of owning it.

🏘️ Renting tends to pay off more if...

You expect to stay only a few years, you don't have enough savings, you value the flexibility to move, mortgage terms aren't favorable, or you can invest that down payment at a good return.

The part many comparisons miss

What if I rent and invest the money?

Renting doesn't mean giving up on building net worth. If you rent, the down payment and closing costs you would have put toward buying can be invested instead of going into the home, as can the monthly difference whenever renting is cheaper than buying. This calculator folds both of those into the net worth of the "rent + invest" scenario. If you want to model that investment in more detail, change the expected return, or add ongoing contributions, our Spanish-language compound interest calculator covers the same math (English version coming soon).

What many comparisons leave out

The real cost of buying a home

Comparing only the mortgage payment to rent leaves out important costs. When you buy, besides the price, it's worth accounting for:

  • The down payment and closing costs (taxes, title, recording, escrow, appraisal).
  • Recurring costs: HOA fees, homeowners insurance, property tax and maintenance.
  • Interest paid over the life of the mortgage.
  • Selling costs, if you ever decide to sell.

There are no universal figures: they vary a lot by home, location and lender. That's why every one of these fields is editable in the calculator.

This calculator provides a rough estimate based on the data you enter. It does not constitute financial advice. Results can vary based on the evolution of prices, rents, interest rates, costs, investment returns and other circumstances. Before making a decision, double-check the numbers and, if needed, consult a qualified professional.

More free tools

More calculators from CalculaMás

Our compound interest, mortgage, debt-to-income and rental yield calculators are currently available in Spanish, aimed at the Spanish market (euros, Spanish taxes). English versions are on the way.

📈 Compound interest calculator (ES)

Simulate how your money could grow with periodic contributions over time.

🏠 Mortgage calculator (ES)

Estimate your monthly mortgage or loan payment and how much you need saved.

🏘️ Rental yield calculator (ES)

Calculate the gross and net yield of a rental property.

📊 Debt-to-income calculator (ES)

Estimate the maximum monthly payment you could reasonably take on.

FAQ

Frequently asked questions about renting vs. buying

Is it better to rent or buy?
There's no universal answer: it depends on the home price, the equivalent rent, your savings, how many years you expect to stay, the interest rate, and the return you could get by investing the money you don't put toward buying. This calculator compares the estimated net worth of both scenarios using your own numbers.
When does it pay off to buy a home?
Buying tends to pay off more when you expect to live in the home for many years, you have enough savings for the down payment and closing costs, you can get financing on good terms, and the equivalent rent is high relative to the purchase price.
When is renting the better choice?
Renting can pay off more when you expect to stay only a few years, you don't have enough savings, you value the flexibility to move, or you can invest the money you'd otherwise spend on buying at an attractive return.
How do you compare renting and buying?
By comparing the estimated net worth in each scenario after several years: for buying, the home's value minus the remaining mortgage balance and selling costs; for renting, the down payment and closing costs you didn't spend, invested, plus the monthly difference between the two options, also invested.
What costs come with buying a home?
Besides the price, you need to account for the down payment, closing costs (taxes, title, recording, escrow, appraisal), monthly HOA fees and insurance, annual property tax and maintenance, mortgage interest, and, if you sell, selling costs.
Is the mortgage payment directly comparable to rent?
Not directly: the payment includes principal paydown (which becomes equity), and you need to add HOA, insurance, property tax and maintenance to compare the real monthly cost of buying against renting.
What happens to the down payment if I rent instead?
If you rent, that same down payment and the closing costs you don't spend get invested instead of going into the home. This calculator adds that investment to the monthly difference between buying and renting to estimate the net worth of the "rent + invest" scenario.
How many years do you need to stay in a home for buying to pay off?
It depends on your specific numbers. This calculator estimates an approximate break-even point: the year in which the net worth of buying and of renting plus investing become equal, based on the assumptions you enter.
How does home price appreciation affect the comparison?
A home that appreciates faster improves the net worth of the buying scenario. It's an assumption, not a prediction — home prices can also fall.
How does rising rent affect the comparison?
Rent that rises quickly every year reduces the money available to invest in the renting scenario, and can make buying pay off sooner.
What is the break-even point between renting and buying?
It's the approximate year in which the estimated net worth of buying equals that of renting and investing, based on the data and assumptions entered. Before that year one option comes out ahead; after it, the other does.
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