Rent vs. Buy Calculator (Total Cost Over Your Stay)
Enter your rent, a home price, and how long you plan to stay. The calculator totals the real cost of each path, counting owning as interest, taxes, and upkeep minus the equity you build, and calls a winner for your timeline.
What a comparable place rents for right now
Rents have historically drifted up most years
The purchase price of the home you'd buy instead
20% avoids PMI; many buyers put down less
Assumes a 30-year fixed loan
Your county's effective rate; 1.1% is a common ballpark
Upkeep, repairs, insurance; 1-2% is typical
The horizon is what usually decides this
Total cost of renting
$174,704
7 years of rent, rising 3% per year
Total cost of owning
$198,032
interest, taxes, and upkeep, minus the equity you build
Verdict
Renting wins
by $23,328 over 7 years, before one-time transaction costs
Year by year, cumulative
| Year | Renting so far | Owning so far (net) | Cheaper |
|---|---|---|---|
| 1 | $22,800 | $29,095 | Renting |
| 2 | $46,284 | $57,950 | Renting |
| 3 | $70,473 | $86,549 | Renting |
| 4 | $95,387 | $114,876 | Renting |
| 5 | $121,048 | $142,912 | Renting |
| 6 | $147,480 | $170,638 | Renting |
| 7 | $174,704 | $198,032 | Renting |
Owning cost = mortgage interest + property tax + maintenance, minus the equity your payments build (principal and down payment come back to you as ownership). Assumes a 30-year fixed loan and a flat home value, and leaves out one-time costs: buying typically adds 2-5% of the price in closing costs and selling another 6-10%, which pushes short stays further toward renting.
How this comparison is scored
Renting is easy to total: this year's rent times twelve, grown by your annual increase, summed over the years you plan to stay. Owning is trickier because most of the monthly payment is not actually a cost. The principal slice of every mortgage payment buys equity you keep, and the down payment converts into ownership the day you close. So the calculator charges owning only for what leaves your pocket for good: interest on a 30-year fixed loan, property tax, and maintenance, then subtracts the equity built by the end. What it deliberately leaves out is symmetrical: no home appreciation on the owning side, and no investment return on the renter's saved down payment. Both are real, both are guesses, and they usually pull in opposite directions.
Worked example: $1,900 rent against a $400,000 house
With 20% down at 6.5%, the loan is $320,000 and principal and interest run about $2,023 a month, which our mortgage calculator breaks down in full. In year one the owner pays roughly $20,700 of interest, $4,400 of property tax at 1.1%, and $4,000 of upkeep at 1%: about $29,100 that never comes back, against $22,800 of rent. Renting starts about $6,300 ahead. But rent climbs 3% a year while the interest bill shrinks as the loan amortizes, so the gap closes a little every year. At the 7-year mark renting has still cost about $23,000 less in this example; push the stay past a decade and owning eventually takes the lead.
The 5-year rule, and when to break it
The classic advice says don't buy unless you'll stay about five years, and the honest version is that five is a soft number. The rule exists because of transaction costs this calculator intentionally excludes: buying typically costs 2-5% of the price in closing costs and selling 6-10% in agent fees and transfer costs, which is $30,000 to $50,000 of round-trip friction on a $400,000 home. In expensive coastal markets with high price-to-rent ratios, renting can stay ahead for a decade; in cheaper metros, owning can win by year three. Run your real numbers, then stress-test the stay length, because it moves the answer more than the rate does. And before any of it, make sure the down payment itself is on schedule with the down payment calculator and a plan for what rent should cost you meanwhile.
Frequently asked questions
Why does the cost of owning subtract equity?
Because most of a mortgage payment is not really spent. The principal portion pays down the loan and becomes ownership you keep, so counting the whole payment as a cost would make buying look far worse than it is. This calculator counts only money that leaves for good: interest, property tax, and maintenance, then credits the equity built.
Is my down payment counted as a cost of buying?
No. It converts into home equity on day one, so it comes back to you when you sell. What the simple math ignores is opportunity cost: that money could have been invested elsewhere while you rented. If you want to be strict, mentally add a few percent per year on the down payment to the owning side.
What is the 5-year rule for buying a house?
A rule of thumb that says buying rarely beats renting unless you stay about five years. The reason is one-time transaction costs: roughly 2-5% of the price to buy and 6-10% to sell. Those fees need years of ownership benefit to earn back, so short stays usually favor renting even when the monthly math looks close.
Does this calculator include home price appreciation?
No, the home value is held flat on purpose. Appreciation helps owning, but investing the down payment would have helped renting, and both are guesses. Leaving both out keeps the comparison transparent. If you expect strong appreciation in your market, treat the owning total as pessimistic.
What owning costs does the estimate leave out?
One-time closing and selling costs, HOA dues, and anything beyond the maintenance percentage you set. Homeowners insurance is typically part of that upkeep bucket, so nudge the maintenance percentage up if your quote is high. It also assumes a 30-year fixed loan for the whole stay.
Does this calculator save my numbers?
No. Everything runs in your browser and nothing you type is stored or sent anywhere.
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