Rent vs Buy Calculator
Compare monthly renting against the cost of owning a home.
Input sheet
DIY at your own risk. Calcora's calculators and guides are general estimates and information only — not professional, engineering, legal, or safety advice. Always verify local building codes and permit requirements, and hire a licensed pro for electrical, gas, plumbing, structural, or any work you're not fully comfortable doing yourself.
The rent-versus-buy question rarely has an obvious answer. This compares your monthly rent against an estimated full cost of owning the same-value home, including the costs people forget.
How it works
Estimates ownership as mortgage principal & interest plus ~1.25% annual property tax and ~0.5% insurance and upkeep, compared to your rent.
Owning is estimated as the mortgage principal and interest plus roughly 1.25% of the home's value per year in property tax and about 0.5% per year for insurance and maintenance — added together as a monthly figure. That total is compared to your rent to show which is cheaper month to month.
This is a monthly cash-flow comparison only. It deliberately ignores home appreciation, the equity you build by paying down principal, the tax deductibility of mortgage interest, and the opportunity cost of your down payment — all of which can tip a longer-term analysis toward buying. Treat the result as a starting point, not a verdict.
Ownership monthly = mortgage P&I + (home price × 1.25% ÷ 12) + (home price × 0.5% ÷ 12); compared against monthly rent
Worked examples
$1,800 rent vs. $350,000 home, 20% down, 6.5% rate → Renting wins on monthly cash flow
The $280,000 mortgage runs about $1,770/mo in P&I, and adding ~1.25% tax and ~0.5% upkeep pushes the owning cost above the $1,800 rent — though that ignores equity and appreciation.
Tips & gotchas
- This is a cash-flow snapshot — over many years, building equity and home appreciation often shift the math toward buying even when renting looks cheaper monthly.
- The longer you stay, the more buying tends to win, because you amortize the large upfront costs (closing, agent fees) over more years.
- Don't forget the opportunity cost of your down payment — that lump sum could be invested instead, which a full analysis should weigh.
- Local conditions dominate: high property-tax areas and frothy home prices favor renting; cheap homes and stable jobs favor buying.
FAQ
Why might renting 'win' even though I build no equity?
This compares only monthly cost. Renting can be cheaper month to month even when buying is the better long-term move once you count equity, appreciation, and tax benefits, which this tool omits.
What costs of owning does this include?
Mortgage principal and interest, plus rough estimates of property tax (~1.25%/year) and insurance and maintenance (~0.5%/year). It excludes HOA dues, closing costs, and PMI.
How long should I plan to stay before buying makes sense?
There's no single number, but the high upfront costs of buying usually need several years of ownership to amortize. Short stays generally favor renting.
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