Total Rent Cost $237,600
Net Buy Cost $198,000
Recommendation BUY
Savings $39,600
Rent vs Buy Calculator
Compare the true costs of renting versus buying a home over your planned time horizon.
How the Comparison Works
The calculator compares total costs over your time horizon:
- Rent: Monthly rent × months, accounting for annual increases
- Buy: Mortgage payments + taxes + maintenance - home equity gained
- Net Buy Cost: Total payments minus equity built in home
Defaults: 3% rent increase/year, 3% home appreciation, 1% property tax, 1% maintenance.
Example
Comparing $1,800/month rent vs buying a $300,000 home over 10 years:
- Total rent paid: ~$237,600
- Net cost of buying (after equity): ~$198,000
- Buying saves ~$39,600
FAQ
- Is it better to rent or buy?
- It depends on how long you plan to stay, local market conditions, and your financial situation. Generally, buying becomes better after 5-7 years.
- What costs does buying include?
- Buying costs include mortgage payments, property taxes, insurance, maintenance, repairs, and opportunity cost of your down payment.
- What about home appreciation?
- Home values typically appreciate 2-4% annually, building equity. This is factored into the buy calculation.
- How long should I plan to stay?
- If staying less than 3-5 years, renting is usually better due to transaction costs. Longer stays favor buying.