Rent vs Buy

Compare the true long-term cost of buying a home versus renting and investing the difference — including the opportunity cost of the down payment.

→ Enter a home price and monthly rent — typical assumptions are applied automatically. Enter a home price and monthly rent — all other fields are pre-filled with typical defaults.

Buying Purchase scenario

Home Price

Down Payment?Portion of the purchase price paid upfront. 20% avoids private mortgage insurance (PMI). Typical range: 5–30%.

Mortgage Rate?Your loan's annual interest rate. US 30-year fixed rates are currently ~6–7%. Check current rates at your lender.

% / yr

Mortgage Term?Loan repayment period. 30 years is most common; 15 years means higher monthly payments but much less total interest paid.

years

Closing Costs?One-time fees at purchase: lender origination, title, appraisal, escrow. US typical: 1.5–5% of the home price.

% of price

Property Tax?Annual tax on the home's assessed value. US average ~1.1%. Varies widely: ~0.3% (Hawaii) to ~2.5% (NJ, IL).

% / yr of value

Maintenance & Repairs?Annual upkeep: HVAC, roof, plumbing, appliances, etc. Common rule of thumb: 1–2% of home value per year.

% / yr of value

Home Insurance?Annual homeowner's insurance (hazard + liability coverage). Held constant in this model. Adjust to match your actual quote.

$ / yr

HOA / Community Fees (optional)

$ / mo

Renting Alternative scenario

Monthly Rent

$ / mo

Annual Rent Increase?How much your rent rises each year. US long-run average ~3%. Higher = renting becomes more expensive over time.

% / yr

Market Assumptions

Home Appreciation?How much home values rise per year. US long-run average: ~3–4% nominally. Varies by location. Use 0–2% for a conservative scenario.

% / yr

Investment Return?Annual return on the renter's invested portfolio. A diversified stock index fund has averaged ~7% real long-term. S&P 500 nominal historical average: ~10%. Higher = renting more competitive.

% / yr

Analysis Horizon?How many years you plan to stay in the area. Buying typically needs 7–10+ years to overcome upfront costs. Shorter horizon usually favors renting.

years

Enter your details above and click Calculate to compare.

Net Worth Over Time

Total wealth at each year — higher line = more money = better outcome. The winning scenario leads at the top.

ⓘ Using typical assumptions — 2% closing costs, 1.1% property tax, 1% maintenance, $1,200/yr insurance, 3% rent increase, 3% home appreciation, 7% investment return, 30-yr horizon.

ⓘ Selling costs not included. The equity figure assumes you hold the home. If you sold at the end, subtract ~5–6% of the home’s value in agent fees and transfer costs (plus any applicable capital-gains tax) — this would push the breakeven somewhat later.

Where your money goes Cumulative costs & returns over your horizon

Why renting isn’t throwing money away The opportunity cost of buying — what the down payment could earn

Year-by-year detail Net worth of each path at each year of your horizon

How this is calculated — Buy Net Worth = Home Value − Remaining Mortgage Balance (home equity). Rent Portfolio = Renter invests the down payment + closing costs upfront; each month the difference between buyer’s total outlay (P&I + property tax + maintenance + insurance + HOA) and rent is invested or withdrawn. Both compound at the investment return rate. Property tax and maintenance scale with current home value each year.

Year	Home Value	Mortgage Balance	Buy Net Worth	Rent Portfolio	Difference (Buy − Rent)	Monthly Buy Cost	Monthly Rent