Home & Living
Rent vs Buy Calculator
Renting and buying rarely differ by as much as people assume once interest and rising rents are both included. This calculator projects both paths across your loan term and shows the gap.
Calculator
The calculation runs in your browser.
What is a Rent vs Buy Calculator?
A rent vs buy calculator is a starting point for comparing two different housing costs. Buying can involve a down payment, financing, taxes, insurance, maintenance and selling costs, while renting can involve rent increases and other recurring charges. The best comparison is not simply the lower monthly payment: look at total cost, time horizon and the assumptions you can realistically defend.
Formula and calculation method
The comparison estimates the modeled cost of renting and the modeled cost of owning over the selected period, including the inputs supplied for recurring and upfront costs.
What this calculator does
Projects two paths over your loan term: renting with yearly rent increases, and buying with a mortgage plus property appreciation. It subtracts the future property value from the buying costs, then compares the two totals.
How to interpret the result
The headline shows which option costs less over the period you entered, and by how much. Treat the gap as indicative, not decisive: a small gap either way means non-financial factors should decide, while a large gap warrants a closer look at your assumptions.
Assumptions
- The mortgage rate stays fixed for the full term.
- Rent rises at the steady percentage you enter every year.
- Property appreciates at a single constant rate, which is the least knowable input.
Limitations
- Excludes maintenance, property taxes, insurance, service charges and transaction fees — all real buying costs.
- Does not model selling costs at the end, which reduce the property value you keep.
- Ignores tax treatment of mortgage interest and capital gains, which vary by country.
- A variable-rate mortgage can change the buying side mid-term; this tool assumes fixed.
How it works
Rent is grown year by year at the increase you enter and summed across the loan term. Buying is treated as the down payment plus every mortgage payment, calculated with the standard amortisation formula, minus the property value after appreciation over the same period. The difference between those two totals is the comparison.
Worked example
A 320,000 property with 64,000 down at 5.5% over 25 years costs about 1,572 a month. Rent starting at 1,200 and rising 4% a year totals far more than a flat projection suggests, which is why long horizons tend to favour buying when appreciation holds up.
How to use it
- Use the rent you pay today, not a national average.
- Enter the interest rate you have actually been quoted; a single percentage point changes the result significantly.
- Try a conservative appreciation rate such as 0–2% to see how the comparison behaves in a flat market.
- Compare several loan durations before deciding.
Factors to consider
- Maintenance typically runs 1% of property value per year and is not included here.
- Buying costs — legal fees, taxes, agent fees — are paid up front and are rarely recovered quickly.
- How long you will stay matters more than the interest rate. Short stays usually favour renting.
Useful for
- Comparing renting versus buying in your specific city with your actual rent and a quoted rate.
- Seeing how sensitive the decision is to how long you plan to stay.
- Testing a cautious appreciation rate to check whether buying still makes sense in a flat market.
Start with the time horizon
The first question in a rent-versus-buy decision is not the interest rate; it is how long you expect to stay. Buying has transaction costs that are painful over a short period and easier to absorb over a long one. A deposit, legal work, taxes, moving, repairs and eventual selling costs can outweigh several months of apparent mortgage savings. Renting, meanwhile, gives you flexibility and transfers much of the repair risk to the landlord. Enter a realistic time horizon and then test a shorter and longer scenario. If the conclusion changes quickly when you move the horizon by a few years, that uncertainty is important and should be part of the decision.
Compare the full cost of ownership
A mortgage payment is only one line on the buying side. Ownership can also involve property taxes, insurance, maintenance, service charges, repairs and the cost of capital tied up in the deposit. The rent side is not simply a monthly rent multiplied by the number of months either; rent increases, moving costs and deposits can matter. This calculator deliberately uses the figures you provide rather than pretending there is one universal cost for every market. Add realistic local costs before treating the result as a serious comparison. A low mortgage payment can still be expensive if the property requires major maintenance or carries high recurring charges.
Test assumptions instead of predicting the future
No calculator can know exactly where property prices, rents or interest rates will be several years from now. That does not make the comparison useless. It means you should run more than one scenario. Try a cautious property-growth assumption, a higher rent increase and a slightly higher ownership cost. Then try a neutral case. Pay attention to whether the decision remains sensible across the range. A result that only works when every assumption is optimistic is a fragile result. A result that survives conservative assumptions is much more useful.
Include the non-financial trade-off
Money is important, but housing decisions also involve stability, commute time, control over the property and the ability to move. Buying can provide a sense of permanence and the possibility of building equity, while renting can make it easier to relocate for work or family reasons. Neither option is automatically superior. Use the calculator to quantify the financial side, then write down the practical benefits and costs that the formula cannot price. The strongest decision is usually the one that fits both your expected finances and the way you actually expect to live.
Frequently asked questions
Why does buying often win over long periods?
Mortgage payments are mostly fixed while rent compounds upward, and you retain an asset at the end. Shorten the horizon and the advantage often disappears.
Does this include property taxes or repairs?
No. Add them mentally as a monthly cost on the buying side, or reduce the appreciation rate to compensate.
What appreciation rate should I use?
Look at long-run figures for your own city and prefer the cautious end. Appreciation is the single most influential input here.