Rent vs Buy Calculator
Compare renting and buying under the same initial cash budget and monthly spending capacity. The result measures terminal wealth, including home equity after selling costs and investments of cash-flow differences, rather than comparing rent with a mortgage payment alone.
Your result
How the calculation works
Each month both investment accounts grow at your effective monthly return. The cheaper option invests the difference in monthly housing outgoings. Buying terminal wealth = home value × (1 − sale-cost rate) − mortgage balance + buyer investments. Renting terminal wealth = renter investments + refundable rent deposit. Initial renter investments equal down payment plus buying closing costs minus rent deposit.
Worked example
Buy a $120,000 home entirely in cash, with no closing, sale or ownership costs. Compare $1,000 monthly rent, no rent deposit and zero investment/home/rent growth. After one year, buying wealth is $120,000 plus $12,000 invested avoided rent, or $132,000; renting wealth remains the equivalent $120,000 initial investment. The difference is $12,000 under these simplified assumptions.
Assumptions and limitations
Mortgage interest is nominal annual divided by twelve. Home value and investments grow monthly; rent changes annually. Property tax and maintenance percentages apply to the contemporaneous home value. Insurance and association fees stay fixed. Home sale is assumed at each annual comparison; the rent deposit is returned in full. The break-even year must remain favorable through your entered horizon.
This is a scenario comparison, not a recommendation. No automatic tax deductions, capital-gains tax, rent-deposit interest or transaction rules are included. Negative equity and investment losses are possible. Use consistent currency and obtain your own local costs. Try different appreciation and return assumptions: small changes can materially alter the comparison.
Sources and editorial responsibility
Maintained by Renvoro Pty Ltd. These mathematical estimates do not provide financial, tax, legal or investment advice.
Method reviewed 2026-10-08. Calculation standards · Report an issue