United States·Calculators·Rent vs buy

Rent vs buy calculator

Both paths over the same number of years, with the deposit invested in the renting case.

Your numbers

Property price

$USD

Deposit

$USD

Buying costs

$USD

Mortgage rate

% p.a.

Mortgage term

years

Weekly rent

$USD / week

Ownership costs

% p.a.

Property growth

% p.a.

Rent growth

% p.a.

Investment return

% p.a.

Compare over

years

Buying ahead by:

$44,092

After 10 years on these assumptions

Buying, net position$574,947

Renting, net position$530,855

Difference$44,092

Better on these numbersBuying

No. These are general information tools. Each one shows the formula it used so you can check the working, but none of them account for your circumstances.

Scenario, not a forecast. Buying costs are paid upfront. The renter invests the deposit and avoided buying costs. Each month, return applies first, then owner costs (rates, insurance and maintenance) on the opening home value minus rent is invested or withdrawn at month-end. An unfunded withdrawal stops the comparison; borrowing is not modelled. Tax, selling costs and unlisted costs are excluded. Amounts over 90 trillion are past what this calculates. All rates, growth assumptions, costs and amounts are supplied by the user; no market forecast or property estimate is supplied The renter invests the deposit and buying costs avoided; each month applies investment return first, then invests or withdraws owner costs minus rent at month-end. The first unfunded withdrawal stops the comparison as unsupported, reporting its month and shortfall; borrowing is not modelled The owner uses a level monthly principal-and-interest mortgage and builds equity from the modelled home value less the remaining balance Home value, rent and the renter investment balance change monthly at the annual rates entered by the user Tax, selling costs, mortgage fees, rent deposits and unlisted ownership costs are excluded unless reflected in the entered assumptions

Source: your own figures · scenario, not a forecastThe arithmetic is the same in every country

The answer is mostly your growth assumption

Change the property growth rate by a percentage point and the result can flip. That is the honest finding of any rent-versus-buy comparison: it is a forecast dressed as arithmetic, and the forecast is doing the work.

The renter starts by investing the deposit and avoided buying costs. The starting inputs are illustrative and all are editable: they are not quotes, cost estimates or forecasts.

Buying costs are a one-off cash payment at purchase, separate from the deposit and not added to the mortgage. Selling costs and tax are excluded. Ownership costs are a combined allowance for rates, insurance and maintenance, not separate estimates: each month charges one-twelfth of the entered annual percentage against that month’s opening home value.

The mortgage uses level monthly principal-and-interest payments at the entered annual rate divided by 12, over the entered term. Weekly rent becomes a monthly amount using 52 weeks divided by 12. Property growth, rent growth and investment return use equivalent monthly compound rates. Home value and rent grow at month-end; investment return applies before the month-end contribution or withdrawal. The comparison cannot exceed the mortgage term.

Common questions

Why does renting sometimes win?

Because the deposit is invested rather than tied up, and ownership costs are real. Over shorter periods, with modest property growth, that combination often comes out ahead.

Related calculators

Property

Mortgage repayments

What a home loan costs each week.