Rent or Buy Calculator

How to use this rent or buy calculator

What this calculator does

This calculator estimates the net financial cost of two housing paths over the same time horizon. In the renting path, it adds monthly rent and one-time rental costs, then subtracts the interest earned if the cash shown in Money you have remains in a savings account. In the buying path, that same cash becomes the down payment, the remaining property price is financed with a fixed-rate amortizing mortgage, recurring ownership fees are added, and the estimated sale value is credited at the end after selling commission and repayment of the remaining mortgage. The result is a scenario comparison, not a determination of affordability or a recommendation to rent or buy. The Consumer Financial Protection Bureau's rent-versus-buy guidance similarly emphasizes that ownership costs and the expected length of time in the home can materially change the comparison.

When to use it

Use the calculator when you are comparing a lease with a possible purchase in the same market, testing whether a shorter or longer planned stay changes the cost balance, stress-testing mortgage-rate or home-appreciation assumptions, or estimating how transaction costs affect the point at which buying may catch up with renting. It is also useful for comparing quotes from different lenders or properties after you replace every demonstration value with your own researched assumptions.

How to calculate

1. The calculator opens with a complete demonstration scenario, finite results, a populated two-bar comparison, and a validated example XLSX that is immediately available from Download Excel.
2. Replace Staying period and Money you have first. Then enter the four rent assumptions and the seven buy assumptions. Results update live; there is no separate Calculate button.
3. Read Rent cost and Buy cost as average monthly equivalents of the modeled totals, not as the exact cash payment due in a particular month. Compare Total rent cost with Total buy cost, and use Mortgage left to see the estimated loan balance at the end of the stay.
4. Use the total-cost bars as a visual comparison of the same two totals. A bar may extend below the zero baseline if appreciation and equity make the modeled net buying cost negative.
5. Choose Download Excel to export the current validated inputs and results. Reset clears the demonstration and all entered financial data; after Reset, the Excel button is disabled until a complete valid state is entered again.

Input guide

Staying period is required and accepts a plain U.S.-style decimal number of years from about one month through 50 years; for example, 7. The calculator converts it to whole months, so 7.5 becomes 90 months. A longer stay generally gives appreciation and mortgage principal reduction more time to influence the buying path. Do not enter units or scientific notation. Money you have is a required nonnegative U.S.-dollar amount, for example $120,000. It cannot exceed Cost of the property in this model. More available cash increases the renter's savings balance but also reduces the mortgage principal for the buyer.

Rent price is required monthly rent in dollars, for example $2,700, with utilities excluded so that the comparison does not double-count costs assumed to be similar in both paths. Agent commission is a required one-time rental transaction cost, such as $1,200, and Other costs is a required one-time rental amount for items such as moving or renter-specific setup, such as $2,500; enter 0 when a cost does not apply. Interest rate (deposit) is a required annual percentage, such as 4%. The model compounds that nominal rate monthly on the original savings balance; a higher rate reduces modeled rent cost because more interest is earned. Do not confuse 4% with 0.04 in the input – the field expects 4.

Cost of the property is the required purchase price, such as $500,000. Interest rate (mortgage) is the required annual fixed mortgage percentage, such as 6.5%, and Loan term is the required amortization period in years, such as 30. The mortgage payment uses the standard fixed-payment amortization relationship; the CFPB explains how principal and interest shift over an amortizing mortgage. A higher mortgage rate increases the monthly payment and usually the modeled buy cost, while a longer term lowers the scheduled payment but leaves more principal outstanding at a given early sale date.

Buying commission is a required percentage of the purchase price paid at acquisition, such as 4%. Selling commission is a required percentage of the estimated future sale value, such as 7%. Other fees is a required annual percentage of the original property price, such as 2.3%, intended to represent recurring ownership costs such as property tax, homeowner's insurance, and repairs within this simplified model. Appreciation is the required annual home-price change, such as 3%; negative values are allowed down to – 99%. Appreciation is compounded annually for the staying period. Avoid treating a recent market increase as a guaranteed future rate; the FHFA House Price Index shows that price changes vary by place and period.

Output guide

Rent cost is the total modeled rent path divided by the number of months. Total rent cost is monthly rent over the stay plus rental commission and other rental costs, minus interest earned on the available cash. Mortgage left is the remaining principal after the scheduled mortgage payments made during the stay; it reaches zero if the stay extends through the full loan term. Buy cost is the total modeled buy path divided by months. Total buy cost adds the down payment, mortgage payments, buying commission, recurring ownership fees, selling commission, and remaining mortgage, then subtracts the estimated sale value. A negative total buy cost means the modeled sale value and equity exceed the modeled cash costs; it does not mean ownership literally had no cash outlays.

The four summary pills repeat the selected stay, the two total costs, and their absolute difference. The Lower modeled cost statement identifies which total is smaller, while the two bars compare Total rent cost and Total buy cost on one dollar axis. Every one of these displays is an estimate driven by the same current assumptions, not an independent recommendation.

Worked example

The startup example uses a 7-year stay, $120,000 of available cash, $2,700 monthly rent, $1,200 rental commission, $2,500 other rental costs, and a 4% deposit rate. The buy case uses a $500,000 property, 6.5% fixed mortgage rate, 30-year term, 4% buying commission, 7% selling commission, 2.3% annual other fees, and 3% annual appreciation. The $380,000 mortgage has an estimated monthly principal-and-interest payment of about $2,401.86. After 84 payments, about $343,581.73 remains. The savings account earns about $38,701.66, bringing modeled total rent cost to $191,798.34, or $2,283.31 per month. The estimated home value grows to about $614,936.93; after modeled financing, recurring costs, transaction costs, and sale proceeds, total buy cost is $193,946.50, or $2,308.89 per month. Under only these assumptions, renting is lower by $2,148.16.