Buying usually wins if you stay long enough – often 5–7 years – because transaction costs are spread out and equity builds. Renting can win when prices are high relative to rents or you may move soon.
How to use the Rent or Buy Calculator
- Staying period
- Monthly rent
- Yearly rent increase
- Cost of the property
- Down payment
- Mortgage interest rate
- Loan term
- Buying costs
- Selling costs
- Property tax (yearly)
- Insurance (yearly, % of price)
- Maintenance (yearly, % of price)
- Home appreciation (yearly)
- Return on savings (if renting)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter how long you will stay, the rent and its yearly increase, the home price, down payment, mortgage, costs, appreciation and the return you could earn on savings.
Tips
- Get a written loan estimate and compare the APR, not just the interest rate.
- Include property tax, insurance, HOA fees and maintenance in your monthly budget.
- A larger down payment lowers the payment and can remove mortgage insurance.
- Rates change daily – use a current quote for the most accurate result.
Common mistakes to avoid
- Looking only at the monthly payment instead of the total cost of the loan.
- Forgetting closing costs and fees.
- Assuming home prices always rise.
Inputs explained
| Field | What to enter |
|---|---|
| Staying period | In years |
| Monthly rent | Amount in your currency |
| Yearly rent increase | In % |
| Cost of the property | Amount in your currency |
| Down payment | In % |
| Mortgage interest rate | In % |
| Loan term | In years |
| Buying costs | In % |
| Selling costs | In % |
| Property tax (yearly) | In % |
| Insurance (yearly, % of price) | In % |
| Maintenance (yearly, % of price) | In % |
| Home appreciation (yearly) | In % |
| Return on savings (if renting) | In % |
What each result means
- Mortgage payment (monthly) = pmt([Mortgage interest rate]÷1200, [Loan term]×12, [Loan])
- Ownership costs over the period (tax, insurance, maintenance) = [Cost of the property]×([Property tax (yearly)] + [Insurance (yearly, % of price)] + [Maintenance (yearly, % of price)])÷100×[Staying period]
- Home value when you leave = [Cost of the property]×(1 + [Home appreciation (yearly)]÷100)^[Staying period]
- Investment gains on the down payment and buying costs = [Cost of the property]×([Down payment] + [Buying costs])÷100×((1 + [Return on savings (if renting)]÷100)^[Staying period] – 1)
- Total cost of renting = [Total rent paid] – [Investment gains on the down payment and buying costs]
- Difference over the period = abs([Total cost of renting] – [Total cost of buying])
Formula
Buy cost = down payment + buying costs + mortgage payments + tax + insurance + maintenance − (sale price − selling costs − remaining loan)Rent cost = Σ rent (growing yearly) − investment gains on the money not spent on the down paymentWorked example
Inputs — Staying period: 7 years; Monthly rent: $2,200; Yearly rent increase: 3 %; Cost of the property: $450,000; Down payment: 20 %; Mortgage interest rate: 6.5 %; Loan term: 30 years; Buying costs: 3 %; Selling costs: 7 %; Property tax (yearly): 1.1 %; Insurance (yearly, % of price): 0.5 %; Maintenance (yearly, % of price): 1 %; Home appreciation (yearly): 3.5 %; Return on savings (if renting): 5 %.
Results — Mortgage payment (monthly) = $2,275.44; Ownership costs over the period (tax, insurance, maintenance) = $81,900.00; Home value when you leave = $572,525.67; Total cost of buying = $169,586.98; Total rent paid = $202,289.00; Investment gains on the down payment and buying costs = $42,134.89; Total cost of renting = $160,154.11; Cheaper option = Renting; Difference over the period = $9,432.87.
Frequently asked questions
Is it cheaper to rent or buy?
It depends on how long you stay, prices, rates and appreciation.
What is the price-to-rent ratio?
Home price ÷ annual rent; above about 20 often favours renting.
How long should I stay to make buying worthwhile?
Often at least 5 years to recover transaction costs.
What formula does the Rent or Buy Calculator use?
Buy cost = down payment + buying costs + mortgage payments + tax + insurance + maintenance − (sale price − selling costs − remaining loan).