Rent vs. buy calculator

Last updated: September 2026 · Verified by Hugo Cardozo.

Why comparing monthly payments isn't enough

A mortgage payment builds equity (through principal paid down and appreciation); rent builds nothing. But a renter isn't spending the down payment or closing costs — they can invest that money instead, plus invest any month their rent happens to be cheaper than the buyer's total housing cost. This calculator tracks both sides all the way to final net worth instead of stopping at "which payment is bigger."

How the comparison works

For the buyer: the down payment and closing costs are spent up front, and every month's payment (principal, interest, property tax, insurance, and maintenance) is tracked. At the end of the period, the buyer's home equity is the home's appreciated value minus whatever mortgage balance is left — that equity is the buyer's net financial result. For the renter: the down payment and closing costs are invested instead of spent, and any month the renter's rent is lower than the buyer's total housing cost, that difference is invested too, growing at the assumed investment return. The renter's invested total is their net financial result.

What usually tips the answer

Buying tends to win over longer time horizons, in markets with strong home appreciation, or when rent growth is high relative to mortgage costs. Renting-and-investing tends to win over shorter horizons, when the investment return assumption is high relative to home appreciation, or in expensive housing markets where the price-to-rent ratio is stretched. Small changes to the appreciation and investment return assumptions can flip the answer — that's not a bug, it reflects how sensitive this decision really is to assumptions nobody can predict with certainty.

Frequently asked questions