Rent vs Buy Calculator

Rent vs buy is a cash-flow question first

The slogan “rent is throwing money away” skips insurance, property tax, and the down payment that could have stayed in a savings account. This rent vs buy calculator puts a monthly ownership stack next to rent and sums both over the years you think you will stay.

It is a planning sketch. Lenders will underwrite DTI and reserves; this page will not.

What is in each monthly number

Ownership is PITI-style: amortizing principal and interest, tax, insurance, HOA, plus a maintenance drag. Rent is the field you type. The gap is not “waste.” It is the price of flexibility versus the price of a leveraged house.

Closing costs and a 6% selling commission are not in the cash totals. If you might move in three years, mentally add them to the own side before you treat a close total as a win.

How to use it

Start with a listing price and the rent of a home you would actually live in—not a studio versus a four-bedroom. Set down payment to the cash you have after emergency reserves. Set stay years to a honest horizon (job, kids, city).

Then run the house affordability and mortgage calculators on the same price so the payment is not a surprise at pre-approval.

What this comparison leaves out

Inflation on rent, house price paths, landlord risk, and the return you might earn on a down payment left invested. Those can flip the story. They can also be used to talk yourself into a house you cannot maintain.

If the monthly own number already strains take-home, stop. Use the paycheck calculator before you shop a higher price.

Typical examples

Frequently asked questions

What costs are in the ownership payment?

Principal and interest on the loan, annual property tax divided by 12, monthly insurance, HOA, and a maintenance percent of price. PMI is not added automatically if the down payment is under 20%.

Why ignore appreciation?

Because a 4% price path is a guess that hides a cash-flow problem. This page answers “what leaves the checking account,” not “what the house might be worth.”

How long do I need to stay for buying to win?

It depends on the down payment and the monthly gap. A large down payment is cash you no longer have for rent or investments on day one. Raise the stay field until the totals tell a story you believe.

Should I include the tax deduction for mortgage interest?

Only if you itemize and the deduction is real after the standard deduction. Most households should treat it as a maybe, not a default discount on this page.

Is renting “throwing money away”?

Interest, tax, insurance, HOA, and maintenance are also spent. Principal is the main part of a payment that becomes equity—and only if the price holds and you stay long enough to outrun selling costs.