FreeCalculators

Rent vs Buy Calculator

Evaluate the financial impact of renting versus buying a home. Our calculator helps you make informed decisions for your housing needs.

Loans & Mortgage · Reviewed by FreeCalculators Editorial · Updated 2026-08-20

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The deciding input — shorter stays favor renting.

Long-run US average ≈ 3-4%.

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How it works

The Rent vs Buy Calculator evaluates the financial implications of renting versus purchasing a home by comparing total costs over a specified period. The formula for calculating the net cost of buying a home includes the down payment, total mortgage payments, and property-related expenses, minus the equity gained at the end of the term. For instance, if you buy a home priced at $450,000 with a $90,000 down payment at a 6.5% mortgage rate over 30 years, your monthly payment would be approximately $2,530. Over 7 years, you would pay around $212,000 in mortgage payments and $12,600 in property taxes. If the home appreciates at 3% annually, its value after 7 years would be about $550,000, giving you an equity of $100,000. In contrast, if you rent at $2,200 per month, with a rent inflation of 3%, you would pay about $185,000 in rent over the same period. This calculator helps you visualize these costs to make an informed decision.

Formula


                Buy net cost = down payment + payments - final equity | Rent total = rent x (1 + rent inflation)^years

Tips

  • Consider your long-term plans; if you intend to stay for less than 5 years, renting might be more economical.
  • Factor in additional costs of homeownership, such as maintenance and repairs, which can add up significantly.
  • Review current market trends for home appreciation and rent inflation to make a more informed decision.
  • Consult with a financial advisor to understand the tax implications and benefits of homeownership versus renting.

Frequently asked questions

What is the total rent paid over 7 years at $2,200 per month?
The total rent paid over 7 years would be approximately $185,000.
How much equity will I have after 7 years if I buy a home for $450,000?
If the home appreciates at 3% annually, you would have around $100,000 in equity after 7 years.
What is the monthly mortgage payment for a $450,000 home with a 6.5% interest rate?
The estimated monthly mortgage payment would be about $2,530.
How do property taxes affect the total cost of buying a home?
With an annual property tax of $7,200, you would pay approximately $12,600 in property taxes over 7 years, adding to your total cost.