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Rent vs. Buy Calculator

Compare the true costs of renting and buying to find the best option for you.

🏠 Renting Costs
$
3%
$
🏡 Buying Costs
$
20% ($80,000)
6.5%
30 years
1.2%/year
$
$
3%
💼 Investment Comparison
7%

S&P 500 historical avg: ~10%/year

10 years

📊 Cost Comparison Analysis

• Total Cost of Renting: $277,533

• Total Cost of Buying: $152,431

📊 Cost Comparison Analysis

Analysis Period (Years): 10 years

Rent: $277,533 Buy: $152,431
64.5%
35.5%

Better Choice:

Buy

Savings: $125,102

Renting Breakdown

Total Rent Paid $275,133
Total Insurance $2,400
Total Cost of Renting $277,533

Buying Breakdown

Down Payment $80,000
Total Mortgage Payments $242,714
Property Taxes $48,000
Insurance Costs $12,000
Maintenance Costs $36,000
Home Equity - $266,283
Total Cost of Buying $152,431

Home Value: $537,567

Key Factors
⏱️ Timeline Matters

Buying typically requires 5+ years to offset transaction costs. If you plan short-term stay, renting may be more economical.

📈 Home Appreciation Assumptions

Home appreciation significantly impacts results. Historical data shows US homes appreciate ~3-4% annually, but varies greatly by location.

💼 Investment Opportunity Cost

The down payment and monthly payment difference between buying and renting, if invested, could generate returns. This calculator includes this factor.

💡 Rent vs. Buy: How to Make the Right Decision?

📋 Key Considerations

  • 🏠
    Living Duration: If planning to stay less than 5 years, renting is recommended. Buying involves high transaction costs like closing fees and agent commissions that are hard to recoup short-term.
  • 💰
    Down Payment Capacity: Traditional advice in the US suggests 20% down to avoid PMI insurance, but low down payment options (3-10%) are viable—weigh the monthly payment pressure.
  • 📈
    Home Price Trends: In high-growth areas (like Silicon Valley, NYC), buying offers better long-term returns; in stable or declining markets, renting provides more flexibility.
  • 💼
    Career Stability: Frequent job relocations (military, consultants) favor renting; stable careers may benefit from buying.
  • 🔧
    Maintenance Willingness: Homeowners handle repairs (roof, HVAC, plumbing); renters have landlords responsible—less hassle.

🧮 Calculator Usage Guide

This calculator comprehensively considers all costs of renting vs. buying:

Renting Costs Include:

  • ✓ Monthly rent (increases annually)
  • ✓ Renter's insurance
  • ✓ Opportunity cost: Investment returns from down payment funds

Buying Costs Include:

  • ✓ Down payment
  • ✓ Monthly mortgage (principal + interest)
  • ✓ Property tax (1-2% of home value annually)
  • ✓ Home insurance
  • ✓ HOA fees + maintenance
  • ✓ Minus: Home equity after appreciation

📊 Real Case Studies

Case: San Francisco Bay Area Tech Worker

  • • Monthly rent: $3,500, 5% annual increase
  • • Home price: $1,200,000, 20% down ($240,000), 6.5% mortgage rate
  • • Home appreciation: 4% annually
  • • Result (10 years): Buying net cost ~$520,000, renting ~$580,000, buying wins with ~$400,000 home equity accumulated

Case: Austin, Texas Young Professional

  • • Monthly rent: $1,800, 3% annual increase
  • • Home price: $450,000, 10% down ($45,000), 7% mortgage rate
  • • Home appreciation: 3% annually
  • • Result (5 years): Renting ~$115,000, buying ~$140,000 (with transaction costs), short-term renting wins, but buying significantly better after 10 years