Rent vs. Buy Calculator
Your numbers
Three fields. Every rate in the comparison is pre-filled and editable — the verdict is assumption-sensitive, so the assumptions are on the table, not behind it.
If renting, this money gets invested instead — that opportunity cost is the heart of the comparison
A place you'd actually live in instead — comparable size and area
The single biggest lever — transaction costs need years to amortize
How we calculate this
A symmetric opportunity-cost model. Both paths run month by month over your horizon. The buyer pays the full PITI (this site's PITI calculator's own math), maintenance, and closing costs — and banks principal paydown plus appreciation, recovered at a simulated sale net of selling costs. The renter pays rent that steps up annually — and invests the down payment, closing costs, and every month's difference whenever renting is cheaper. When buying is cheaper, the buyer invests the difference instead. Nobody's spare dollar disappears; that symmetry is what most rent-vs-buy arguments quietly break.
Everything is nominal, then discounted to today. Rents, home values, and portfolios grow at their stated nominal rates; every cash flow is then discounted at 2.5% inflation so the verdict is in today's dollars — the same convention as our student loan tool. The investment return default (9.57% nominal) is derived from the site's sourced 6.9% real US equity average and the 2.5% inflation default, so the two tools can't quietly disagree.
Tax treatment — a deliberate, labeled asymmetry: investment returns are shown pre-tax, and home-sale gains are assumed to fall within the §121 primary-residence exclusion ($250k single / $500k joint). Not taxing either side is a defensible simplification, but it is an asymmetric one that favors the renter when investment gains are large — at big margins, remember the renter's portfolio would owe capital gains tax in reality. The mortgage-interest deduction isn't modeled either: in the post-2017 standard-deduction era, most buyers don't itemize.
What else we don't model: rent control, moving costs, HOA on the rent side, refinancing, and sequence-of-returns risk on the invested difference. The verdict is genuinely assumption-sensitive — appreciation and investment return move it most, which is why both sit one tap away, editable, above your result.
Real scenarios
Elevated price-to-rent: renting wins big
A $400,000 home versus $2,200 rent — a price-to-rent ratio around 15, common in today's expensive metros — with $80,000 down over 10 years. Renting comes out ahead by about $189,000 in today's dollars, and buying never breaks even inside the decade. The renter's invested down payment does most of that work.
Moderate ratio: buying wins, breakeven year 7
A $300,000 home versus $2,400 rent — ratio around 10, typical of many midwestern and southern markets — with $60,000 down. Buying wins by about $62,000 over 10 years, breaking even in year 7. Same math, opposite verdict: the price-to-rent ratio, not a philosophy, decides this.
10% down: PMI joins the buy column
A $350,000 home with $35,000 down versus $1,900 rent. PMI rides along until month 95, when the balance reaches 80% of the purchase price — and renting still wins by about $192,000 on these assumptions. A thinner down payment both adds PMI and shrinks the amount the comparison invests for you, so it moves both columns at once.