{"id":67239,"date":"2026-10-20T13:06:03","date_gmt":"2026-10-20T10:06:03","guid":{"rendered":"https:\/\/wpcalc.com\/en\/?p=67239"},"modified":"2026-10-20T13:06:03","modified_gmt":"2026-10-20T10:06:03","slug":"rent-vs-buy-calculator","status":"publish","type":"post","link":"https:\/\/wpcalc.com\/en\/finance\/rent-vs-buy-calculator\/","title":{"rendered":"Rent vs Buy Calculator"},"content":{"rendered":"<section class=\"not-prose calculator-box\" aria-labelledby=\"calculator-title\"><div class=\"flex items-baseline sm:items-center justify-between gap-2 sm:gap-3\"><div class=\"flex flex-col sm:flex-row sm:items-center gap-2\"><span class=\"icon icon-calculator text-primary-700! text-base! dark:text-primary-300!\" aria-hidden=\"true\"><\/span><h2 id=\"calculator-title\" class=\"text-lg font-display font-bold\">Compare the Cost of Renting vs Buying a Home<\/h2><\/div><div class=\"calcdash-favorite group\">\n  <button type=\"button\" class=\"favorite\" id=\"favorite\" data-favorite-id=\"67239\" data-favorite-title=\"Rent vs Buy\" data-favorite-url=\"https:\/\/wpcalc.com\/en\/finance\/rent-vs-buy-calculator\/\" data-favorite-excerpt=\"Enter the home price, mortgage terms and ownership costs on one side and your rent on the other to see the total net cost of buying versus renting over your time horizon, plus the break-even year at which buying becomes cheaper.\" aria-label=\"Add to Favorites\" data-favorite-icon=\"icon icon-loan\">\n    <span class=\"icon icon-shape-star-empty\" aria-hidden=\"true\"><\/span>\n  <\/button>\n  <div class=\"calcdash-favorite__tip\" aria-hidden=\"true\">\n   <span class=\"favorite-tooltip\" id=\"favorite-tooltip\"><\/span>\n  <\/div>\n  <span class=\"sr-only\" role=\"status\" id=\"favorite-status\"><\/span>\n<\/div><\/div><form action=\"https:\/\/wpcalc.com\/en\/finance\/rent-vs-buy-calculator\/\" method=\"POST\" class=\"calculator\" id=\"calculator-67239\" data-post=\"67239\"><fieldset class=\"fieldset-input is-2\"><legend class=\"sr-only\">Input Fields<\/legend><div class=\"is-single field\" id=\"input-1\"><span class=\"font-semibold\">Buying a Home<\/span><\/div><div class=\"field\" id=\"input-2\"><label for=\"field-2\">Home price<\/label><input type=\"text\" name=\"home_price\" id=\"field-2\" aria-describedby=\"calc-unit-2 calc-info-2\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0.01\" value=\"400000\"\/><div class=\"unit\" id=\"calc-unit-2\">$<\/div><small id=\"calc-info-2\">Purchase price of the home you would buy.<\/small><\/div><div class=\"field\" id=\"input-3\"><label for=\"field-3\">Down payment<\/label><input type=\"text\" name=\"down_payment\" id=\"field-3\" aria-describedby=\"calc-unit-3 calc-info-3\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"20\"\/><div class=\"unit\" id=\"calc-unit-3\">%<\/div><small id=\"calc-info-3\">Share of the price paid in cash upfront.<\/small><\/div><div class=\"field\" id=\"input-4\"><label for=\"field-4\">Mortgage interest rate<\/label><input type=\"text\" name=\"mortgage_interest_rate\" id=\"field-4\" aria-describedby=\"calc-unit-4 calc-info-4\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"100\" value=\"6.5\"\/><div class=\"unit\" id=\"calc-unit-4\">%<\/div><small id=\"calc-info-4\">Annual fixed rate on the loan.<\/small><\/div><div class=\"field\" id=\"input-5\"><label for=\"field-5\">Loan term<\/label><div class=\"grid grid-cols-1\"><select id=\"field-5\" name=\"loan_term\"><option value=\"10\">10 years<\/option><option value=\"15\">15 years<\/option><option value=\"20\">20 years<\/option><option value=\"30\" selected>30 years<\/option><\/select><svg class=\"pointer-events-none col-start-1 row-start-1 mr-2 size-5 self-center justify-self-end text-gray-500 sm:size-4\" viewBox=\"0 0 16 16\" fill=\"currentColor\" aria-hidden=\"true\" data-slot=\"icon\">\n              <path fill-rule=\"evenodd\" d=\"M4.22 6.22a.75.75 0 0 1 1.06 0L8 8.94l2.72-2.72a.75.75 0 1 1 1.06 1.06l-3.25 3.25a.75.75 0 0 1-1.06 0L4.22 7.28a.75.75 0 0 1 0-1.06Z\" clip-rule=\"evenodd\" \/>\n            <\/svg><\/div><\/div><div class=\"field\" id=\"input-6\"><label for=\"field-6\">Closing costs<\/label><input type=\"text\" name=\"closing_costs\" id=\"field-6\" aria-describedby=\"calc-unit-6 calc-info-6\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"20\" value=\"3\"\/><div class=\"unit\" id=\"calc-unit-6\">%<\/div><small id=\"calc-info-6\">Buyer&#039;s closing costs, as a share of the home price.<\/small><\/div><div class=\"field\" id=\"input-7\"><label for=\"field-7\">Property tax<\/label><input type=\"text\" name=\"property_tax\" id=\"field-7\" aria-describedby=\"calc-unit-7 calc-info-7\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"10\" value=\"1.1\"\/><div class=\"unit\" id=\"calc-unit-7\">% per yr<\/div><small id=\"calc-info-7\">Annual property tax as a share of the home&#039;s value.<\/small><\/div><div class=\"field\" id=\"input-8\"><label for=\"field-8\">Homeowner&#039;s insurance (per year)<\/label><input type=\"text\" name=\"homeowners_insurance_per_year\" id=\"field-8\" aria-describedby=\"calc-unit-8\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"1800\"\/><div class=\"unit\" id=\"calc-unit-8\">$<\/div><\/div><div class=\"field\" id=\"input-9\"><label for=\"field-9\">HOA dues (per month)<\/label><input type=\"text\" name=\"hoa_dues_per_month\" id=\"field-9\" aria-describedby=\"calc-unit-9 calc-info-9\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"0\"\/><div class=\"unit\" id=\"calc-unit-9\">$<\/div><small id=\"calc-info-9\">Homeowners association or condo fees.<\/small><\/div><div class=\"field\" id=\"input-10\"><label for=\"field-10\">Maintenance<\/label><input type=\"text\" name=\"maintenance\" id=\"field-10\" aria-describedby=\"calc-unit-10 calc-info-10\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"10\" value=\"1\"\/><div class=\"unit\" id=\"calc-unit-10\">% per yr<\/div><small id=\"calc-info-10\">Annual upkeep as a share of the home&#039;s value.<\/small><\/div><div class=\"field\" id=\"input-11\"><label for=\"field-11\">Home appreciation<\/label><input type=\"text\" name=\"home_appreciation\" id=\"field-11\" aria-describedby=\"calc-unit-11 calc-info-11\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"20\" value=\"3\"\/><div class=\"unit\" id=\"calc-unit-11\">% per yr<\/div><small id=\"calc-info-11\">Expected annual growth of the home&#039;s value.<\/small><\/div><div class=\"field\" id=\"input-12\"><label for=\"field-12\">Selling costs<\/label><input type=\"text\" name=\"selling_costs\" id=\"field-12\" aria-describedby=\"calc-unit-12 calc-info-12\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"20\" value=\"6\"\/><div class=\"unit\" id=\"calc-unit-12\">%<\/div><small id=\"calc-info-12\">Realtor and other costs when you sell, as a share of the sale price.<\/small><\/div><div class=\"is-single field\" id=\"input-13\"><span class=\"font-semibold\">Renting<\/span><\/div><div class=\"field\" id=\"input-14\"><label for=\"field-14\">Monthly rent<\/label><input type=\"text\" name=\"monthly_rent\" id=\"field-14\" aria-describedby=\"calc-unit-14 calc-info-14\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"2600\"\/><div class=\"unit\" id=\"calc-unit-14\">$<\/div><small id=\"calc-info-14\">Rent for a home comparable to the one you would buy.<\/small><\/div><div class=\"field\" id=\"input-15\"><label for=\"field-15\">Annual rent increase<\/label><input type=\"text\" name=\"annual_rent_increase\" id=\"field-15\" aria-describedby=\"calc-unit-15\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"20\" value=\"4\"\/><div class=\"unit\" id=\"calc-unit-15\">%<\/div><\/div><div class=\"field\" id=\"input-16\"><label for=\"field-16\">Renter&#039;s insurance (per year)<\/label><input type=\"text\" name=\"renters_insurance_per_year\" id=\"field-16\" aria-describedby=\"calc-unit-16\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"180\"\/><div class=\"unit\" id=\"calc-unit-16\">$<\/div><\/div><div class=\"is-single field\" id=\"input-17\"><span class=\"font-semibold\">Time Horizon and Investments<\/span><\/div><div class=\"field\" id=\"input-18\"><label for=\"field-18\">Years to compare<\/label><input type=\"text\" name=\"years_to_compare\" id=\"field-18\" aria-describedby=\"calc-info-18\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"1\" max=\"30\" value=\"7\"\/><small id=\"calc-info-18\">You are assumed to sell the home (and move out of the rental) after this many years.<\/small><\/div><div class=\"field\" id=\"input-19\"><label for=\"field-19\">Investment return<\/label><input type=\"text\" name=\"investment_return\" id=\"field-19\" aria-describedby=\"calc-unit-19 calc-info-19\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" max=\"25\" value=\"6\"\/><div class=\"unit\" id=\"calc-unit-19\">% per yr<\/div><small id=\"calc-info-19\">Return on the down-payment cash and any monthly savings if you rent instead of buying.<\/small><\/div><\/fieldset><div class=\"buttons\"><button type=\"submit\" data-text=\"Re-Calculate\" id=\"calculate-button\" data-post=\"67239\">Calculate<\/button><button type=\"reset\">Reset<\/button><\/div><div class=\"field is-checkbox hidden!\" id=\"field-auto-calc\"><input type=\"checkbox\" id=\"auto-calc\"><label for=\"auto-calc\">Calculate automatically<\/label><small>If enabled, the result will update automatically when you change any value.<\/small><\/div><div class=\"fieldset-result is-hidden\" aria-labelledby=\"result-title\" aria-live=\"polite\" role=\"region\"> <h3 class=\"result-title bg-gradient-to-r from-primary-50 to-gray-50 dark:from-primary-900 dark:to-gray-800\" id=\"result-title\"><span class=\"icon icon-s-pulse\" aria-hidden=\"true\"><\/span> Rent vs Buy Results<\/h3><div class=\"result-box\"><div class=\"field-result\" id=\"output-1\"><span class=\"field-title\"><span>Net cost of buying<\/span><\/span><span class=\"field-value\" id=\"result-1\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-2\"><span class=\"field-title\"><span>Net cost of renting<\/span><\/span><span class=\"field-value\" id=\"result-2\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result is-column\" id=\"output-3\"><span class=\"field-title\"><span>Cheaper option<\/span><\/span><span class=\"field-value\" id=\"result-3\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result is-column\" id=\"output-4\"><span class=\"field-title\"><span>Break-even year<\/span><\/span><span class=\"field-value\" id=\"result-4\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result\" id=\"output-5\"><span class=\"field-title\"><span>Monthly mortgage payment (P&amp;I)<\/span><\/span><span class=\"field-value\" id=\"result-5\" data-unit=\"$\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result is-column\" id=\"output-6\"><span class=\"field-title\"><span>Cumulative net cost chart<\/span><\/span><span class=\"field-value\" id=\"result-6\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><div class=\"field-result is-column\" id=\"output-7\"><span class=\"field-title\"><span>Year-by-year comparison<\/span><\/span><span class=\"field-value\" id=\"result-7\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><\/div><div class=\"result-actions\"><button type=\"button\" class=\"copy-link\"><svg viewBox=\"0 0 20 20\" fill=\"currentColor\" aria-hidden=\"true\"><path d=\"M12.232 4.232a2.5 2.5 0 0 1 3.536 3.536l-1.225 1.224a.75.75 0 0 0 1.061 1.06l1.224-1.224a4 4 0 0 0-5.656-5.656l-3 3a4 4 0 0 0 .225 5.865.75.75 0 0 0 .977-1.138 2.5 2.5 0 0 1-.142-3.667l3-3Z\"\/><path d=\"M11.603 7.963a.75.75 0 0 0-.977 1.138 2.5 2.5 0 0 1 .142 3.667l-3 3a2.5 2.5 0 0 1-3.536-3.536l1.225-1.224a.75.75 0 0 0-1.061-1.06l-1.224 1.224a4 4 0 1 0 5.656 5.656l3-3a4 4 0 0 0-.225-5.865Z\"\/><\/svg><span class=\"copy-link__text\">Copy link to this calculation<\/span><\/button><span class=\"sr-only\" role=\"status\" id=\"copy-link-status\"><\/span><\/div><\/div><a href=\"#respond\" class=\"hidden transition-opacity duration-300 opacity-0 w-50 text-sm justify-center items-center gap-2 px-4 py-2 rounded bg-gray-200 text-gray-700 hover:bg-gray-300\" id=\"leave-comment\"><span class=\"icon icon-comments\" aria-hidden=\"true\"><\/span>Leave a Comment<\/a><\/form><\/section><section id=\"calc-reactions\" class=\"not-prose hidden my-12 bg-gradient-to-r from-primary-50 to-gray-50 border border-indigo-100 rounded-xl px-6 py-4 shadow-sm\" data-post=\"67239\" aria-live=\"polite\" aria-labelledby=\"calc-reactions-title\"><p id=\"calc-reactions-title\" class=\"text-sm text-gray-500 text-center mb-2\">How did this result make you feel?<\/p><div role=\"group\" aria-labelledby=\"calc-reactions-title\" class=\"grid grid-cols-3 sm:flex sm:flex-row sm:justify-around gap-4 sm:items-center sm:flex-wrap\"><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"like\"><span class=\"reaction-count\" data-reaction-count=\"like\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude00 <\/span><span class=\"reaction-description font-medium\">Like <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"helpful\"><span class=\"reaction-count\" data-reaction-count=\"helpful\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\udca1 <\/span><span class=\"reaction-description font-medium\">Helpful <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"confused\"><span class=\"reaction-count\" data-reaction-count=\"confused\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude15 <\/span><span class=\"reaction-description font-medium\">Confused <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"disappointed\"><span class=\"reaction-count\" data-reaction-count=\"disappointed\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude1e <\/span><span class=\"reaction-description font-medium\">Disappointed <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"inaccurate\"><span class=\"reaction-count\" data-reaction-count=\"inaccurate\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\u274c <\/span><span class=\"reaction-description font-medium\">Inaccurate <\/span><\/button><\/div><div id=\"reaction-message\" class=\"hidden mt-8 rounded-md border border-primary-100 bg-white\/50 backdrop-blur-sm px-4 py-2 text-sm text-center shadow-sm\"><\/div><\/section><div class=\"calcdash-ad not-prose calcdash-ad--calc_result calcdash-ad--in-article\"><ins class=\"adsbygoogle\" style=\"display:block\" data-ad-client=\"ca-pub-1721569815777345\" data-ad-slot=\"6317458308\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\"><\/ins><script>(adsbygoogle = window.adsbygoogle || []).push({});<\/script><\/div>\n<style id=\"wpcoderpro-inline-1\">.formula-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section class=\"formula-box\" aria-labelledby=\"formula-title\">\r\n\t<div id=\"formula-title\" class=\"not-prose font-display mb-4\"><span class=\"icon icon-formula\" aria-hidden=\"true\"><\/span><h2>Rent vs Buy Formula<\/h2><\/div>\r\n\t<figure class=\"not-prose formula\">\r\n\t\t<figcaption class=\"formula-title\">Formula<\/figcaption>\r\n\t\t<div class=\"text-base text-gray-800\" id=\"formula\">\n\\[ M = L \\cdot \\frac{i\\,(1+i)^{n}}{(1+i)^{n}-1} \\\\\nC_{\\text{buy}}(t) = S_{\\text{buy}}(t) - \\bigl(V_t - B_t - c_{\\text{sell}} V_t\\bigr) \\\\\nC_{\\text{rent}}(t) = S_{\\text{rent}}(t) - A_t \\]\n<\/div>\r\n\t<\/figure>\r\n\t<\/p>\n<p><strong>Where:<\/strong><\/p>\n<ul>\n<li>\\(M\\) \u2014 monthly mortgage payment (principal and interest)<\/li>\n<li>\\(L\\) \u2014 loan amount: home price minus the down payment<\/li>\n<li>\\(i\\) \u2014 monthly interest rate: the annual mortgage rate divided by 12<\/li>\n<li>\\(n\\) \u2014 total number of payments: loan term in years times 12<\/li>\n<li>\\(C_{\\text{buy}}(t)\\) \u2014 net cost of owning the home for \\(t\\) years<\/li>\n<li>\\(S_{\\text{buy}}(t)\\) \u2014 everything the buyer pays by year \\(t\\): down payment, closing costs, mortgage payments, property tax, insurance, HOA dues and maintenance<\/li>\n<li>\\(V_t\\) \u2014 the home's value in year \\(t\\), growing at the appreciation rate<\/li>\n<li>\\(B_t\\) \u2014 the remaining loan balance in year \\(t\\)<\/li>\n<li>\\(c_{\\text{sell}}\\) \u2014 selling costs as a fraction of the sale price<\/li>\n<li>\\(C_{\\text{rent}}(t)\\) \u2014 net cost of renting for \\(t\\) years<\/li>\n<li>\\(S_{\\text{rent}}(t)\\) \u2014 total rent and renter's insurance paid by year \\(t\\)<\/li>\n<li>\\(A_t\\) \u2014 the renter's investment balance: the down-payment cash plus each month's savings, compounded at the investment return<\/li>\n<\/ul>\n<p>The comparison values both options the same way: total cash out, minus the wealth you get back \u2014 home equity after selling costs for the buyer, the investment balance for the renter. The option with the lower net cost at your horizon is the cheaper one.<\/p>\n<p>\r\n<\/section>\n<style id=\"wpcoderpro-inline-459\">.calculation-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section id=\"calculation\" class=\"calculation-box\" aria-labelledby=\"calculation-title\">\r\n\t<div id=\"calculation-title\" class=\"not-prose font-display\"><span class=\"icon icon-unordered-list\" aria-hidden=\"true\"><\/span><h2>Rent vs Buy \u2013 Calculation Example<\/h2><\/div>\r\n\r\n<\/p>\n<p><strong>Example:<\/strong> A $400,000 home bought with 20% down on a 6.5% 30-year mortgage, with 3% closing costs, 1.1% property tax, $1,800\/yr insurance, 1%\/yr maintenance, 3%\/yr appreciation and 6% selling costs \u2014 versus renting a comparable home for $2,600\/month rising 4% per year, with $180\/yr renter's insurance, a 7-year horizon and a 6% investment return (the calculator's default values).<\/p>\n<p>The loan amount is \\(L = 400{,}000 \\times (1 - 0.20) = 320{,}000\\), at a monthly rate of \\(i = 0.065\/12 = 0.0054167\\) over \\(n = 360\\) months:<\/p>\n<p>\\[ M = 320{,}000 \\cdot \\frac{0.0054167\\,(1.0054167)^{360}}{(1.0054167)^{360} - 1} \\approx 2{,}022.62 \\]<\/p>\n<p><strong>Result:<\/strong> The monthly mortgage payment (P&amp;I) is about $2,022.62. Over the 7-year horizon the net cost of buying is about $166,800 and the net cost of renting about $105,400, so renting is cheaper by roughly $61,000 \u2014 the calculator reports no break-even year within the 7-year window.<\/p>\n<p>\n\r\n<\/section>\n<h2>How to use the calculator<\/h2>\n<ol>\n<li>Under <strong>Buying a Home<\/strong>, enter the <em>Home price<\/em>, <em>Down payment<\/em> (as a percentage), <em>Mortgage interest rate<\/em>, and choose a <em>Loan term<\/em> of 10, 15, 20 or 30 years.<\/li>\n<li>Fill in the owner's costs: <em>Closing costs<\/em>, <em>Property tax<\/em>, <em>Homeowner's insurance (per year)<\/em>, <em>HOA dues (per month)<\/em> if any, and annual <em>Maintenance<\/em> as a percentage of the home's value.<\/li>\n<li>Set <em>Home appreciation<\/em> (how fast the property's value grows) and <em>Selling costs<\/em> (realtor and other fees due when you sell).<\/li>\n<li>Under <strong>Renting<\/strong>, enter the <em>Monthly rent<\/em> for a comparable home, the <em>Annual rent increase<\/em>, and <em>Renter's insurance (per year)<\/em>.<\/li>\n<li>Under <strong>Time Horizon and Investments<\/strong>, set the <em>Years to compare<\/em> (you are assumed to sell the home at the end) and the <em>Investment return<\/em> earned on the cash a renter keeps free.<\/li>\n<li>Read the <em>Net cost of buying<\/em>, <em>Net cost of renting<\/em> and <em>Cheaper option<\/em>, then check the <em>Break-even year<\/em>, the <em>Monthly mortgage payment (P&amp;I)<\/em>, the cumulative cost chart and the year-by-year table below the results.<\/li>\n<\/ol>\n<h2>What \"net cost\" means \u2014 and why it matters<\/h2>\n<p>Comparing a rent check to a mortgage payment is misleading. Part of every mortgage payment builds equity, and the home itself may appreciate; a renter gets none of that back, but keeps the down-payment cash free to invest. Both sides also carry costs the other doesn't: the buyer pays closing costs, property tax, insurance and upkeep, and sells at a discount through realtor fees; the renter pays rising rent and gives up any investment gains they would have made on tied-up cash.<\/p>\n<p>The calculator therefore simulates both paths month by month. For the buyer, it adds up the down payment, closing costs, mortgage payments, property tax, insurance, HOA dues and maintenance, then subtracts what you would recover by selling at that point: the home's value minus the remaining loan balance and selling costs. For the renter, it adds up rent \u2014 which steps up once a year \u2014 plus renter's insurance, then subtracts the investment account built from the buyer's upfront cash and any monthly savings, <a href=\"https:\/\/wpcalc.com\/en\/finance\/compound-interest\/\">compounded monthly<\/a> at your assumed return.<\/p>\n<p>Whichever net cost is lower at your horizon wins. The <em>Break-even year<\/em> is the first year in which selling the home would leave you no worse off than renting that long; before it, renting is cheaper even after counting the renter's investment gains. Because transaction costs are front-loaded while equity and appreciation compound over time, short horizons usually favor renting and long ones buying \u2014 which is why the default 7-year scenario keeps renting ahead.<\/p>\n<h2>Assumptions, limitations and practical tips<\/h2>\n<ul>\n<li><strong>Taxes are excluded.<\/strong> The mortgage interest and property tax deductions, the capital-gains exclusion on a primary residence, and taxes on investment gains can all shift the result, often in the buyer's favor.<\/li>\n<li><strong>PMI is not modeled.<\/strong> With a down payment under 20%, most lenders add private mortgage insurance, which can add 0.3\u20131.5% of the loan per year to the buyer's side.<\/li>\n<li><strong>The renter is assumed to be disciplined.<\/strong> All of the down-payment cash and every monthly difference is invested at the stated return. If that money sits unspent or uninvested, renting looks worse than shown.<\/li>\n<li><strong>Small assumption changes matter.<\/strong> Appreciation, rent growth and investment returns are guesses; a 1\u20132 percentage point change in any of them can flip the answer. Run a few realistic scenarios rather than trusting one.<\/li>\n<li><strong>Fixed dollar amounts stay nominal.<\/strong> Insurance, HOA dues and renter's insurance do not rise with <a href=\"https:\/\/wpcalc.com\/en\/finance\/inflation-calculator-value-of-money-over-time\/\">inflation<\/a> in this model, while rent, taxes and maintenance do grow.<\/li>\n<li>Before committing, check how the payment fits your budget with the <a href=\"https:\/\/wpcalc.com\/en\/finance\/debt-to-income-ratio-calculator\/\">debt-to-income ratio calculator<\/a>; extra principal payments, which you can model with the <a href=\"https:\/\/wpcalc.com\/en\/finance\/mortgage-payoff-calculator-with-extra-payments\/\">mortgage payoff calculator<\/a>, also shorten the break-even horizon.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Enter the home price, mortgage terms and ownership costs on one side and your rent on the other to see the total net cost of buying versus renting over your time horizon, plus the break-even year at which buying becomes cheaper.<\/p>\n","protected":false},"author":3168,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[30],"class_list":["post-67239","post","type-post","status-publish","format-standard","hentry","category-finance","tag-mortgage"],"acf":[],"_links":{"self":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/67239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/users\/3168"}],"replies":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/comments?post=67239"}],"version-history":[{"count":1,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/67239\/revisions"}],"predecessor-version":[{"id":67268,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/67239\/revisions\/67268"}],"wp:attachment":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/media?parent=67239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/categories?post=67239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/tags?post=67239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}