Rent vs Buy Calculator

Deciding whether to rent or buy is one of the biggest financial decisions most people make. This calculator estimates your total net cost over 5 years for both options — accounting for mortgage payments, closing costs, maintenance, property tax, equity built through principal repayment, home appreciation, rent increases, and the opportunity cost of tying up your down payment in a property rather than investing it. By comparing the true all-in cost of each path side by side, you can see which option is financially better over a five-year horizon given your specific home price, mortgage rate, rent, and local market assumptions. Adjust the home appreciation and rent increase rates to see how sensitive the verdict is to different market scenarios. In high-cost cities with strong appreciation, buying often looks more attractive despite higher mortgage payments, while in slower markets with modest appreciation, renting and investing the down payment can be the financially superior choice over a five-year window.

Buying net cost is calculated as: down payment + closing costs (estimated at 3% of home price) + 5 years of monthly mortgage payments (principal and interest only, using the standard amortisation formula) + maintenance costs (estimated at 1% of home value per year) + property tax (estimated at 1.2% per year) − total equity gained. Equity gained equals the principal repaid through mortgage payments plus the appreciation in home value over five years, calculated by compounding the home price at your chosen appreciation rate. Renting net cost equals five years of rent payments (grown annually at your specified increase rate) plus the opportunity cost of the down payment — modelled as the return that capital would have earned if invested at 6% per year instead. The comparison is a useful approximation; it does not include PMI, HOA fees, home insurance, or transaction costs when selling.