Rent or Buy Calculator

The rent or buy calculator compares two housing paths over the same planned stay. Renting means paying monthly rent, paying any rental agent or move-in costs, and keeping your available cash where it can earn interest. Buying means using available cash as a down payment, paying a mortgage, paying purchase and sale transaction costs, and receiving sale proceeds at the end. The calculator reports total rent cost, total buy cost, estimated savings, monthly mortgage payment, mortgage left at sale, estimated selling price, and the lower-cost option.

This page is a comparison model, not a full homeownership budget. It intentionally uses a compact set of inputs so you can see how price, rent, rates, commissions, appreciation, and time interact. For a pure mortgage payment estimate, use the mortgage calculator. For a monthly household spending plan, use the budget calculator. If you are analyzing a property as an investment rather than a place to live, use the rental property ROI calculator.

How the comparison works

The renting side begins with rent paid over the full stay. It adds rent agent commission and other rent costs, then subtracts interest earned on the money you have available. That subtraction matters because renting can preserve cash that buying would lock into a down payment. If the deposit rate is high or the stay is short, the interest benefit can be meaningful.

The buying side assumes your available cash is used as the down payment, limited by the property price. The remaining price becomes the loan amount. A fixed-payment mortgage formula estimates the monthly mortgage payment. The calculator then tracks how much mortgage is paid during the stay and how much principal remains at sale. It projects a selling price by compounding appreciation and subtracts that sale price from the total buy cost, while adding buying costs, selling costs, down payment, mortgage paid, and remaining loan balance.

The result is net cost, not monthly affordability. A lower buy cost does not mean the monthly payment is comfortable. A lower rent cost does not mean renting is always better if you value stability, control, and potential long-term ownership. Use the result to focus your assumptions and then check cash flow separately.

Formula

The renting side is:

$\text{total rent cost} = \text{monthly rent} \times 12 \times \text{years} + \text{rent commission} + \text{other rent costs} - \text{deposit interest}$

Deposit interest is:

$\text{deposit interest} = \text{money available} \times \left(1 + \frac{\text{deposit rate}}{100}\right)^{\text{years}} - \text{money available}$

The buying side is:

$\text{total buy cost} = \text{down payment} + \text{buying costs} + \text{mortgage paid} + \text{selling costs} + \text{mortgage left} - \text{selling price}$

The calculator then compares the two totals:

$\text{savings} = \left|\text{total rent cost} - \text{total buy cost}\right|$

Worked example

Using the default inputs, assume a 5-year stay, $80,000 available cash, $2,200 monthly rent, 8.33 percent rent agent commission on annual rent, $1,000 of other rent costs, 3 percent deposit interest, $400,000 property price, 6.5 percent mortgage rate, 30-year loan, 2 percent buying commission, 6 percent selling commission, $5,000 other buy and sell fees, and 3 percent annual appreciation.

Annual rent is $2,200 times 12, or $26,400. Rent over 60 months is $132,000. The rent commission is $2,199.12 and other rent costs are $1,000. The $80,000 cash grows to $92,741.93 at 3 percent for 5 years, so deposit interest is $12,741.93. Total rent cost is $132,000 plus $2,199.12 plus $1,000 minus $12,741.93, or $122,457.19.

For buying, the down payment is $80,000 and the loan amount is $320,000. Buying costs are 2 percent of $400,000 plus $5,000, or $13,000. The monthly mortgage payment is about $2,022.62, so mortgage paid during 5 years is $121,357.06. The remaining mortgage balance at sale is $299,555.13. A 3 percent annual appreciation rate increases the estimated selling price to $463,709.63. Selling costs at 6 percent are $27,822.58. Total buy cost is $80,000 plus $13,000 plus $121,357.06 plus $27,822.58 plus $299,555.13 minus $463,709.63, or $78,025.14.

The difference is $44,432.06, so the calculator reports that buying is cheaper by that amount under these assumptions. Change the stay to two years, lower appreciation, or raise selling costs, and the result may flip.

Context and benchmarks

Rent versus buy decisions are especially sensitive to time, interest rates, home price growth, transaction costs, and cash alternatives. High mortgage rates increase the carrying cost of buying. High rent growth can make renting less attractive if the calculator’s flat rent assumption understates future rent. High selling commissions penalize short stays. Strong appreciation helps buying, but it is uncertain and can reverse.

A common benchmark is the break-even stay: the number of years after which buying becomes cheaper than renting. This calculator does not solve that automatically, but you can change the staying period until the lower-cost option changes. Also compare the monthly mortgage payment with current rent and with the rent calculator to avoid choosing a lower long-term net cost that strains monthly cash flow.

Practical tips

• Test pessimistic, base, and optimistic appreciation rates.
• Include realistic selling costs if you might move soon.
• Remember that maintenance, property tax, insurance, and HOA fees can materially affect ownership.
• Use a deposit rate that matches where your cash would actually sit while renting.
• Revisit the comparison after lender quotes, inspection findings, and local rent estimates.

Informational note

This calculator provides educational estimates only. It does not include every tax rule, maintenance event, utility difference, opportunity cost, insurance change, or lifestyle preference. Home values can fall, rents can rise, loans can be denied, and transaction costs vary. Confirm assumptions with lenders, agents, inspectors, tax professionals, and local market data.

Sources

• CFPB, Owning a Home — consumer guidance for mortgage shopping and homebuying decisions.
• CFPB, Explore interest rates — mortgage rate comparison context.
• Freddie Mac, Primary Mortgage Market Survey — mortgage market rate context.