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Rent vs buy calculator

Set the rent, the home price and the years you expect to stay to see which leaves you with more, and why.

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SalaryHome · Rent vs buy calculator

Printed · Mortgage rates: Freddie Mac weekly averages as of October 15, 2026

https://www.salaryhome.com/rent-vs-buy-calculator/

Renting
Buying

30-year fixed: Freddie Mac weekly average as of October 15, 2026, for illustration.

The years ahead

Renting comes out ahead by

after 7 years

Buying does not pull ahead within 7 years

Estimate for planning, based on the figures you enter. We are not a lender or broker, and this is not a loan offer or financial advice.

What this assumes

  • Rent starts at $2,200.00 a month. Rent rises 3% a year, once a year.
  • Home price $400,000 with $80,000 down; the rest is a 30-year fixed loan at 7.4%.
  • Closing costs 3% of the price, paid when you buy.
  • Property tax 1% of the home's value a year. Upkeep 1% of its value a year.
  • Homeowners insurance $1,800 in the first year, rising 3% a year.
  • Home value rises 3% a year.
  • Selling costs 6% of the sale price when you sell.
  • Money not spent on housing earns 6% a year: the renter invests the down payment and closing costs, and each month whichever choice costs less invests the difference.
  • You stay 7 years, then sell.
  • No income tax effects: no mortgage interest deduction, no tax on investment gains or on the home sale.
Wealth if you buy
$168,992.42
Wealth if you rent
$211,976.56
Home equity after selling costs
$168,992.42
Rent paid
$202,289.04
Cash spent owning
$353,204.00
Wealth if you buy and if you rent, by year

The lines do not cross in this period.

Show the math
  1. Loan$400,000 - $80,000 down at 7.4% over 30 years$320,000.00
  2. Assumption: renter starts withdown payment + buyer closing costs (3% of price), invested at 6% a year$92,000.00
  3. Assumption: monthly differencewhichever option costs less each month invests the gap at the same return
  4. Assumption: growthrent 3%, home value 3%, insurance 3% a year; tax 1% and upkeep 1% of value
  5. Rent paid over 7 years$2,200 a month to start$202,289.04
  6. Cash spent owning over 7 yearsdown payment + closing + payments + tax + insurance + upkeep$353,204.00
  7. Equity after selling costsvalue - loan balance - 6% selling costs$168,992.42
  8. Renter wealthinvested down payment and monthly differences$211,976.56
  9. Owner wealthequity + any invested monthly differences$168,992.42
  10. Buying advantageowner wealth - renter wealth-$42,984.14
  11. Buying does not come out ahead within 7 years

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Your inputs

  • Mortgage rates: Freddie Mac weekly averages as of

How the comparison works

Both sides spend the same money, so the comparison is fair. The renter keeps the down payment and closing costs invested. Each month the buyer pays the mortgage, property tax, insurance and upkeep; the renter pays rent. Whichever choice costs less that month invests the difference. At the end of your stay the buyer sells the home, pays off the loan and the selling costs, and keeps the rest; the renter has the portfolio. The one with more is ahead.

With $2,200.00 rent rising 3% a year, against a $400,000 home with $80,000 down at 7.4%, home values rising 3% a year and savings earning 6%, the buyer ends 7 years with $168,992 and the renter with $211,977. Within these years buying never comes out ahead.

How long you stay changes the answer

Buying and selling cost money: closing costs of 3% of the price when you buy and selling costs of 6% when you sell. Those take years of equity growth to earn back, so short stays favor renting. On the same numbers, 3 years favors renting, by $40,056; 15 years favors renting, by $34,205. The table of years in the calculator shows where the line is crossed for your own inputs.

The assumptions that swing the result

Home price growth is the biggest. At 1% a year instead of 3%, the 7-year result moves to renting, by $97,308. The return on the renter's savings pulls the other way: the higher it is, the more renting gains from keeping the down payment invested. The mortgage rate matters too; one point lower moves the result to renting, by $16,249. Rent growth matters most over long stays, since the owner's principal and interest stay fixed while rent keeps climbing.

Every assumption is listed beside the result and goes into the printed report, so you can see exactly what the answer rests on. Change one at a time to find out which ones decide it for you.

What the calculator leaves out

It ignores income tax effects, such as the mortgage interest deduction, which helps only those who itemize, and tax on investment gains. It also cannot price what is not money: the freedom to move for a job, the right to change a kitchen, or the risk of a landlord selling the building. Weigh those yourself once the numbers are clear.

What the inputs mean

  • Rent and rent growth: today's rent for a comparable home and how fast it rises.
  • Price, down payment, rate and term: the purchase and the loan.
  • Property tax, insurance and upkeep: the yearly costs of owning, as a share of value or in dollars.
  • Appreciation and investment return: the two growth rates the answer depends on most.
  • Years you stay: when you would sell.

Common mistakes

  • Comparing rent with the mortgage payment alone. Tax, insurance and upkeep belong on the buying side.
  • Assuming the renter spends the savings. The comparison holds only if the difference is invested.
  • Using a long-run national price trend for a local market that may run hotter or colder.

Rent vs buy questions

Is it better to rent or buy?

It depends most on how long you stay. With $2,200.00 rent against a $400,000 home at 7.4%, the result after 7 years favors renting, by $42,984. After 3 years it favors renting, by $40,056, and after 15 years renting, by $34,205.

Is rent just throwing money away?

No more than mortgage interest, property tax, insurance and upkeep are. Those are the unrecoverable costs of owning, and in the early years of a loan they can exceed rent. What buying adds is forced saving through principal and exposure to the home's price, which can go either way.

What if I would not invest the money I save by renting?

Then set the investment return to what the money would really earn, such as a savings account rate. The comparison only treats renting fairly if the renter's savings are invested at the rate you enter; spent savings build no wealth.

What assumption matters most?

Home price growth and the return on invested savings, followed by how long you stay. If prices rise 1% a year instead of 3%, the 7-year result moves to renting, by $97,308. A rate one point lower moves it to renting, by $16,249.

Sources

Mortgage rates: Freddie Mac weekly averages as of . How we calculate.