Zehum
Free tool

Free Rent vs Buy Calculator

Compare the true cost of renting against buying over the years you'd actually stay.

If you buy
If you rent
Over 10 years, renting costs less by
$10,152
Net cost of buying
$192,396
Net cost of renting
$182,244
Monthly mortgage
$2,023
Equity after selling costs
$234,029

How this is calculated

Buying counts your deposit, purchase fees, every mortgage payment and all property costs, then credits back the equity you'd walk away with after selling fees. Renting counts every rent payment, then credits the growth your deposit would have earned if invested instead — $184,889 by year 10.

Tax relief on mortgage interest and inflation on upkeep are excluded, since both vary too much by country to model generically.

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What a rent vs buy calculator really compares

The usual version of this argument compares a monthly mortgage payment against a monthly rent, which is close to meaningless. Ownership brings costs that rent doesn't — property tax, insurance, maintenance, purchase fees, selling fees — and renting brings an advantage that ownership doesn't: the deposit stays invested. This calculator accounts for both sides, then credits the buyer with the equity they build, so you're comparing total net cost rather than two monthly figures.

How to use it

Fill in the buying column from a property you'd realistically purchase, and the renting column from what an equivalent home actually rents for — comparing a house you'd buy against a flat you'd rent will skew the result. Then set how long you'll stay, which is the input that moves the answer most.

Change that one field from 5 years to 15 and watch the conclusion flip. That sensitivity is the real insight here: the rent-versus-buy question doesn't have a general answer, it has an answer for a specific holding period.

Why the length of stay dominates

Buying front-loads its costs. You pay purchase fees on day one and selling fees on the way out, and in the early years of a mortgage almost all of your payment goes to interest rather than to equity. Those costs are fixed regardless of how long you stay, so the longer you spread them the smaller they become per year — and the more time appreciation and principal repayment have to work in your favour.

This is why the conventional wisdom that renting is “throwing money away” is unreliable. In the first few years of ownership, a large share of your payment goes to interest, tax and upkeep, none of which builds equity either. What makes buying pay is time, not the act of buying.

What the numbers can't tell you

Run the comparison, then hold it loosely. Security of tenure, the freedom to renovate, the flexibility to move for a job, the stress of an unexpected roof repair, and how a mortgage would feel during a period of unemployment are all real factors that don't appear in the total. Use the loan repayment calculator to see the full amortization behind the mortgage figure, the emergency fund calculator to check you could absorb a bad year as an owner, and the net worth calculator to see how home equity would sit alongside the rest of your position.

Frequently asked questions

Is it better to rent or buy?

It depends more on how long you'll stay than on anything else. Buying carries large one-off costs at both ends — typically 3–5% to purchase and 5–7% to sell — so short stays rarely recover them. Below about five years renting usually wins; beyond ten years buying usually does, though local rents, prices and appreciation can shift that.

How does this calculator compare the two options?

For buying, it totals your deposit, purchase fees, every mortgage payment and all property costs, then credits back the equity you'd walk away with after selling fees. For renting, it totals every rent payment, then credits the investment growth your deposit would have earned had you invested it instead. Whichever has the lower net cost wins.

Why does the invested deposit matter?

Because it's the real alternative. Money used as a deposit isn't available to invest, and ignoring that overstates the case for buying. This is the opportunity cost of ownership, and over ten years at a 7% return it's a substantial figure — often large enough to change which option comes out ahead.

What appreciation rate should I use?

Long-run house price growth in many markets has been in the region of 3–4% a year nominally, though with long flat periods and sharp regional variation. Use a conservative figure and test a pessimistic one — buying looks far less attractive at 1% appreciation than at 5%, and neither assumption is safe to treat as certain.

What should I put for tax, insurance and upkeep?

Around 2% of the home's value per year is a common rule of thumb, covering property tax, insurance and maintenance combined. It's higher for older properties and in high-property-tax areas, and it's the cost most first-time buyers underestimate. Add any service charges or HOA fees on top.

Does this include tax relief on mortgage interest?

No. Mortgage interest deductions, capital gains exemptions and stamp duty or transfer taxes vary enormously between countries and even between states, so modelling them generically would produce a misleadingly precise answer. If your jurisdiction offers meaningful relief, buying will look somewhat better than shown here.

What does this leave out?

The non-financial side, which is often decisive. Owning brings security of tenure and freedom to alter the property, along with maintenance responsibility and reduced mobility. Renting brings flexibility and a predictable, capped monthly cost. Treat the numbers as one input to the decision rather than the whole of it.

Is my data saved?

No. Everything runs in your browser, and nothing you type is transmitted or stored.

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