Is it better to buy or rent?
Compare buying a home with renting and investing the difference, year by year. Enter your own mortgage rate and assumptions — the result is a scenario, not a prediction.
Your result
Fill in all fields to see your result — it updates automatically.
What this doesn't include
This estimate does not include closing costs when buying, HOA/condo fees, PMI (private mortgage insurance), mortgage points, moving costs, or selling agent fees. These can meaningfully change the real numbers, so account for them separately.
Home appreciation, rent growth and investment return are your own assumptions about the future, not predictions. Small changes to them can flip the result.
How it works
The tool runs a year-by-year simulation comparing two paths over your chosen time horizon: buying (mortgage amortization, property tax, insurance, maintenance, home appreciation) versus renting and investing the difference between your rent and what buying would have cost each month. At the end of the horizon, it compares the buyer's net home equity against the renter's investment portfolio.
Worked example
A $400,000 home, 20% down, 7.361% mortgage rate over 30 years, 1.2% annual property tax, $1,500 annual insurance, 1% annual maintenance, 3% assumed home appreciation, against $2,200 monthly rent growing 3% annually, with the renter investing the difference at an assumed 7% annual return, over a 10-year horizon: the renter ends up ahead, with a $278,296 portfolio versus $260,680 in buyer net worth — no break-even reached within 10 years under these specific assumptions.
FAQ
Does a higher home price always favor renting?
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Not necessarily — the result depends heavily on your specific inputs, especially the mortgage rate, assumed home appreciation, and assumed investment return. Small changes to those assumptions can flip the result.
What isn't included in the calculation?
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HOA fees, closing costs and selling costs aren't modelled as separate line items — see the note below the calculator for why, and how to think about them separately.
Why does the renter's portfolio start with money at all?
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It's seeded with what the buyer would have spent on a down payment and closing costs, since the renter doesn't spend that money upfront — this keeps the comparison fair.
Limitations
All growth-rate inputs (appreciation, rent growth, investment return) are your own assumptions, not predictions — small changes to any of them can meaningfully change the outcome. The simulation also doesn't model tax deductions on mortgage interest where they apply, or the non-financial value of owning versus renting.