Buy vs Rent Calculator

Compare buying vs renting a home with our advanced calculator and make data-driven decisions for your future. BuyVsRent.io weighs the full cost of ownership against renting — including the opportunity cost of your down payment — so you can see which path actually builds more wealth over time.

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How this calculator works

The calculator runs a year-by-year comparison of two scenarios. On the buying side, it totals your mortgage payments, property taxes, homeowners insurance, maintenance, and closing costs, and tracks how your home equity grows as the property appreciates. On the renting side, it totals your rent over time and — crucially — invests the money you would have spent on a down payment and any monthly savings, so the comparison accounts for the opportunity cost of tying up cash in a home.

The result is a clear picture of your long-term net worth under each choice and the break-even point — the year at which buying becomes cheaper than renting. You can tailor the analysis with historical property and rental growth rates for your region (data provided by Zillow), your tax situation, and your expected investment returns, then track how your wealth builds through property ownership versus alternative investments.

Frequently asked questions

What costs does the calculator include when comparing buying and renting?

On the buying side: mortgage principal and interest, mortgage insurance (required when your down payment is below 20% on a conventional mortgage), property tax, homeowners insurance, HOA fees, maintenance, and any additional income tax compared to renting. On the renting side: rent, renters insurance, and any additional income tax compared to buying. You can view all of these together as your total cost, or narrow the view to just recoverable or non-recoverable costs.

What's the difference between recoverable and non-recoverable costs?

Recoverable costs are money that builds equity you keep, like mortgage principal payments. Non-recoverable costs are money you don't get back — mortgage interest, mortgage insurance, property tax, home insurance, HOA fees, and maintenance for buyers; rent and renters insurance for renters, since renters have no recoverable housing costs at all. Comparing non-recoverable costs alone is a common way to judge day-to-day affordability separately from equity building.

What is opportunity cost, and how does it factor into the comparison?

Whichever option costs less each month leaves you with extra cash. The calculator assumes that cash doesn't sit idle — it can be spent, saved, invested in a stock/bond portfolio, or, for buyers, applied directly to the mortgage to reduce future interest. If invested, it grows at your chosen expected return; that growth, or the reduced mortgage interest, is the opportunity cost credited to whichever option is cheaper.

How does my down payment affect the results?

Your down payment, interest rate, and mortgage length together determine your monthly mortgage payment. A down payment below 20% of the purchase price on a conventional mortgage also triggers mortgage insurance, an added monthly cost until you build enough equity. Mortgage interest is generally tax-deductible too, which can affect the income tax side of the comparison.

Does buying always build more net worth than renting?

Not necessarily. The calculator tracks net worth as home equity — from both mortgage principal payments and home price appreciation — plus cash and other investments for buyers, versus an invested portfolio of savings for renters. You can also switch between unrealized net worth (value on paper) and realized net worth (what you'd actually walk away with after selling), since the two can tell different stories.

Does the calculator account for the cost of selling my home?

Yes. Selling costs include real estate agent commission (typically 2-3% of the sale price), closing costs (typically 1-2%), and capital gains tax on both your home and any investment portfolio you'd need to liquidate. These show up in the realized net worth view, which reflects what you'd actually keep after selling, as opposed to unrealized net worth, which reflects value before a sale.

How are my income taxes estimated, and how does owning a home change them?

Federal and state income taxes are estimated from your filing status, dependents, and pre-tax income. As a homeowner, deductions like mortgage interest and property tax can lower your taxable income relative to renting, so the calculator separately tracks your estimated tax owed and the tax savings attributable to homeownership — savings that vary from state to state, since not every state offers the same deductions.

How do property taxes and maintenance costs factor in?

Property tax is charged yearly as a percentage of your home's assessed value — typically 1-2% — and generally funds local services like schools and law enforcement. Maintenance defaults to an estimate of about 1% of the purchase price per year (roughly $250/month on a $300,000 home), adjusted for inflation, though you can enter your own figure if your property's age or condition warrants something different. Renters don't pay either cost directly, which is part of why they can meaningfully delay a buyer's break-even point.

Where does the home price and rent data come from?

When you search by zipcode, city, county, or metro area, typical purchase prices and appreciation rates are auto-filled using Zillow's Home Value Index, and typical rents and rent growth are auto-filled using Zillow's Observed Rent Index. You can always override the auto-filled values with your own numbers if you have more specific information about a property.

What return rate should I use for invested cash?

The calculator offers preset historical blends as a starting point: an aggressive portfolio (100% US stocks), a moderate portfolio (60% stocks / 40% bonds), and a conservative portfolio (20% stocks / 80% bonds), plus a simple savings account preset. Pick one under the expected return lookup, or enter your own assumption if you have a different investment strategy in mind.