Rent vs. Buy Calculator

Before you calculate

Use this calculator when you want to test how stay length, rent growth, home appreciation, property tax, insurance, HOA, maintenance, closing costs, selling costs, and assumed investment return move the modeled rent-versus-buy break-even point. Use Mortgage Payment for principal-and-interest only, House Affordability for income and debt limits, Down Payment for cash-to-close planning, Rent for income-based rent affordability, and lender, tax, insurance, HOA, lease, or legal sources for official figures.

Formula summary

The app calculates downPaymentAmount as homePrice * downPaymentPercent / 100 and loanAmount as max(homePrice - downPaymentAmount, 0). Monthly mortgage payment uses the fixed-payment formula with annualRate / 100 / 12 and loanTermYears * 12. Buying upfront cost equals downPaymentAmount plus homePrice * buyingClosingCostRate / 100. Renting upfront cost equals securityDeposit plus renterUpfrontCost. For each year from 1 through 30, the app adds buying mortgage payments, property tax grown by propertyTaxIncreaseRate, homeowners insurance and HOA grown by costInsuranceIncreaseRate, maintenance as appreciated home value * maintenanceRate / 100, selling costs, opportunity cost on buying upfront cash, then subtracts modeled sale equity and a simplified tax benefit. Renting cost adds rent grown by rentIncreaseRate, renters insurance grown by costInsuranceIncreaseRate, renter upfront cost, and opportunity cost on renter upfront cash, then subtracts the returned security deposit. Break-even is the first year where average monthly buying net cost is less than or equal to average monthly renting net cost.

Worked example

Example: default assumptions reach modeled break-even in year 4

With the default inputs, a $400,000 home, 20 percent down payment, 6.5 percent annual mortgage rate, 30-year term, 3 percent buying closing costs, 1.2 percent property tax, $1,500 yearly home insurance, $1,200 yearly HOA, 1 percent maintenance, 3 percent appreciation, 6 percent selling costs, $2,400 monthly rent, 3 percent rent growth, $25 monthly renters insurance, $2,400 security deposit, $500 renter upfront cost, 5 percent assumed investment return, and 27 percent combined marginal tax rate produce a $320,000 loan amount and $2,022.62 monthly mortgage payment. The model reports $92,000 buying upfront cost, $2,900 renting upfront cost, $4,552.59 year-1 average buying cost, $2,478.75 year-1 average renting cost, $2,145.32 year-5 buying cost, $2,596.09 year-5 renting cost, $1,513.61 year-30 buying cost, $3,867.99 year-30 renting cost, and a 4-year break-even.

The example shows how upfront cash, ownership costs, rent growth, appreciation, tax-rate assumptions, sale equity, and opportunity cost interact. It is not a lender quote, affordability decision, tax calculation, insurance estimate, investment forecast, property-price forecast, buy-versus-rent recommendation, or personal financial advice.

Assumptions

• The calculator compares average monthly net cost at 1, 5, 10, and 30 years. Buying costs can fall in later rows because the model subtracts sale equity after appreciation and remaining loan balance. That does not make appreciation, sale price, or transaction timing certain.
• The tax fields are a simplified sensitivity input, not a tax return. The app adds marginal federal and state tax rates, caps the combined rate at 100 percent, and applies it to modeled mortgage interest plus property tax. The taxFilingStatus field is captured for scenario compatibility and validation coverage, but it does not change the formula today. The app does not model itemizing versus the standard deduction, SALT limits, mortgage-interest debt limits, AMT, filing-status thresholds, phaseouts, local rules, points, capital gains, or real tax forms.
• The estimate excludes PMI, escrow administration, lender underwriting, credit pricing, prepayment penalties, rent control, lease break fees, moving costs, furniture, utilities, repairs beyond the maintenance-rate assumption, special assessments, local transfer taxes, title fees beyond the entered closing-cost rates, and product-specific or jurisdiction-specific rules. Package fixtures cover a four-year break-even case and a later 15-year break-even case, and internal independent comparator checks may be used only as validation evidence. CFPB mortgage payment materials are needed before copy explains principal-and-interest versus total monthly payment, escrow, tax, insurance, PMI, or HOA boundaries. CFPB Loan Estimate, Closing Disclosure, and Regulation Z section 1026.37 materials are needed before copy discusses official mortgage offers, projected payments, closing costs, or disclosure forms. IRS Publication 530, Publication 936, and Publication 523 are needed before homeowner deduction, mortgage-interest, property-tax, itemization, points, sale-of-home, or capital-gain tax claims. Results are educational estimates, not financial, tax, legal, lending, mortgage, investment, real-estate, or personalised advice.

Common mistakes to avoid

• Comparing rent only with the mortgage principal-and-interest payment. The buying side also includes closing costs, property tax, homeowners insurance, HOA, maintenance, selling costs, equity, tax-rate assumptions, and opportunity cost.
• Treating appreciation, rent growth, investment return, property tax, or insurance growth as forecasts. They are user-entered assumptions for a scenario, not live market predictions.
• Reading break-even as a buy or rent recommendation, or assuming tax filing status changes the result. The break-even year only says when this model's average monthly buying cost first falls below modeled renting cost under the entered assumptions, and the marginal tax-rate fields affect the simplified tax benefit while filing status is recorded but not used in the calculation.

Methodology and sources

This calculator is an original implementation based on the app's documented rent-versus-buy formulas, app-specific assumptions, deterministic fixtures, edge cases, rounding policy tests, and internal validation. It is not copied from a single source.

Outputs are checked with deterministic fixtures, edge cases, rounding policy tests, and internal validation artifacts. The result remains an educational estimate, not a homebuying recommendation, rent recommendation, lender quote, approval, tax answer, legal answer, insurance estimate, investment forecast, or personalised advice.

Formula version 2026.05.22-generic-rent-vs-buy. The version marks the calculation logic and validation fixture set used for this estimate.

• CFPB mortgage payment materials should be used before copy discusses principal-and-interest versus total monthly payment, escrow, property tax, homeowners insurance, mortgage insurance, HOA dues, or affordability boundaries.
• CFPB Loan Estimate, Closing Disclosure, and Regulation Z section 1026.37 materials should be used before copy discusses official mortgage offers, projected payments, closing costs, cash to close, lender forms, or disclosure requirements.
• IRS Publication 530, Publication 936, and Publication 523 should be used before copy discusses homeowner deductions, real-estate taxes, mortgage-interest deduction, itemization, points, sale-of-home exclusion, capital gains, or other tax treatment.
• Local tax authorities, insurers, HOA or co-op documents, lease documents, lender disclosures, legal sources, real-estate professionals, and local regulators should be used before copy makes jurisdiction-specific, product-specific, rent-control, transfer-tax, repair, special-assessment, insurance, approval, tax, or legal claims.

Estimate only

The result is educational and is not financial, tax, legal, lending, investment, or regulated advice. Real provider terms, fees, rates, taxes, and personal circumstances can change the final answer.

Formula and help: read the full rent vs. buy calculator methodology notes.

Related reading

• Rent vs buy without the drama
• How Calcs.finance validates calculator formulas
• Estimate limitations and not-advice disclaimer

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