Results are estimates for illustration only and not financial, tax, or investment advice. Verify with a qualified, registered advisor before making decisions.
Buy or Rent House Calculator
Last updated
The rent vs buy calculator evaluates the 30-year net wealth impact of purchasing residential real estate versus renting an equivalent property and investing the savings in index funds. It factors in down payments, mortgage interest, property taxes, maintenance costs, and capital appreciation. Everything calculates in your browser without logging personal financial figures.
Should you buy or rent? Compare the long-term net worth impact of buying a home versus renting and investing.
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How Do You Compare the Total Financial Cost of Renting vs Buying?
Pick ₹, $, € or £ in the calculator — it changes the symbol and number format, not the amounts.
Key Cost and Wealth Drivers:
• Homeownership Capital: Combines upfront down payment and monthly mortgage amortization with recurring property taxes (default 1.2%) and maintenance costs (default 1.0%), offset by compound property appreciation (default 3.5%).
• Renting & Investing: The renter invests the initial down payment sum and any ongoing monthly cash savings when rent is lower than the buyer's total outflow into an investment portfolio compounding at the expected return rate (default 7.0%).
Worked Example (30-Year Simulation):
1. Home Purchase Price: $400,000 with a 20% down payment ($80,000) and 6.5% 30-year mortgage ($320,000 loan, $2,023/month principal and interest).
2. Property Overhead: 1.2% property tax ($4,800/yr starting), 1.0% maintenance ($4,000/yr starting), 3.5% annual home appreciation.
3. Rental Alternative: $2,000/month starting rent with 3.0% annual rent increase, investing down payment and monthly differences at 7.0% return.
4. Year 30 Buyer Net Worth: $1,131,139 (home value appreciates to $1,122,717 with mortgage fully paid off).
5. Year 30 Renter Net Worth: $1,062,776 (accumulated investment portfolio).
6. Outcome at 30 Years: Buying yields $68,363 higher net worth under these baseline assumptions.
The Rent vs Buy Calculator simulates a 30-year financial comparison between buying a home and renting while investing the difference, projecting your comparative net worth trajectories.
Definition: Rent vs Buy Net Worth Comparison
A multi-year financial simulation comparing the accumulated equity and costs of homeownership against the compounding growth of a tenant's investment portfolio.
What Housing Costs, Appreciation Rates, and Investment Returns Are Modeled?
Required Inputs
- Home Purchase PriceThe total purchase price of the residential property.
- Down Payment (%)The percentage of home value paid upfront in cash (typically 10% to 20%).
- Mortgage Interest Rate (%)The fixed annual interest rate on the 30-year mortgage.
- Monthly RentStarting monthly rent for a comparable home.
- Annual Rent Increase (%)Projected annual percentage increase in rent.
- Investment Return (%)Expected annual return earned on invested down payment and monthly cash flow differences.
- Home Appreciation (%)Projected annual capital growth rate of the property.
- Currency SelectorPick ₹, $, € or £ — it changes the symbol and number format, not the amounts.
Expected Outputs
- Buyer Net Worth at 30 YearsTotal value of the paid-off home minus cumulative ownership overhead.
- Renter Net Worth at 30 YearsTotal accumulated value of the renter's compounding investment portfolio.
- 30-Year Wealth Comparison ChartVisual curves displaying comparative net worth trajectories year by year.
Who Uses the Rent vs. Buy Calculator?
Relocation and Housing Mobility
Evaluate whether purchasing property makes financial sense if relocation is possible within a few years.
Down Payment Opportunity Cost
Quantify the trade-off between committing cash to home equity versus compounding in an investment portfolio.
Total Cost of Ownership Analysis
Factor in recurring taxes and maintenance alongside mortgage payments when evaluating housing costs.
Long-Term Retirement Housing
Compare entering retirement with a fully paid-off home versus holding a larger liquid investment portfolio.
How Do You Analyze the Rent vs Buy Decision for Your Situation?
- 1Select your currency symbol (₹, $, €, or £) from the selector.
- 2Enter the purchase price of the home and your intended down payment percentage.
- 3Input your mortgage interest rate, estimated property appreciation, and tax rates.
- 4Enter monthly rent for a comparable home along with expected rent inflation.
- 5Inspect the 30-year net worth trajectories for both paths on the comparative chart.
Frequently Asked Questions
Why is buying often less advantageous over short periods?
Transaction costs on real estate—including closing fees, transfer taxes, and moving expenses—add substantial upfront overhead that takes several years of equity build-up and appreciation to offset.
Does the simulation assume the renter invests all savings?
Yes. The mathematical comparison assumes the renter invests the down payment cash and any monthly savings when rent is lower than total homeownership costs into an investment portfolio.
How do maintenance costs affect homeownership net worth?
Maintenance costs (typically modeled around 1% of home value annually) represent unrecoverable outflows required to maintain property condition and value.