Methodology
How the rent or buy comparison works
The calculator answers one question: given the same money, which path leaves you wealthier, buying a home or renting and investing the difference?
The equal-budget principle
Most rent vs buy comparisons favor one side by ignoring what the cheaper option does with its savings. This calculator gives every option the same starting cash and the same monthly budget:
- Upfront: the option with the highest upfront cost (down payment + closing costs + one-time costs) sets the cash baseline. Every other option invests the difference from day one.
- Monthly: each year, the most expensive option sets the monthly budget. Cheaper options invest the gap at your chosen investment return.
- Net wealth: for buyers, home equity (appreciation + principal paydown) plus investments. For renters, investments alone. Both are plotted over your full time horizon.
Mortgage payments use standard amortization. Maintenance and property tax scale with home value as it appreciates. Rent grows at its own annual rate. You can override any assumption per option and add custom costs to either side.
Frequently asked questions
Is it cheaper to rent or buy a home?
It depends on your numbers: home price, mortgage rate, rent, how long you stay, and what your savings could earn if invested instead. Buying builds home equity but adds property tax, insurance, maintenance, and closing costs. Renting keeps upfront costs low and frees the down payment to be invested. This calculator projects both paths side by side using your real numbers so you can see which builds more wealth over your time horizon.
How does the calculator keep the comparison fair?
Every option starts with the same total cash and the same monthly budget. If one option costs less upfront (for example, renting avoids a down payment and closing costs), the difference starts out invested. If one option costs less per month, the monthly savings are invested as they occur. Net wealth for each path is home equity plus investments, so neither side gets a hidden advantage.
What costs does the buying scenario include?
Mortgage principal and interest (standard amortization), property tax, homeowners insurance, maintenance (as a percentage of home value), utilities, condo or HOA fees, closing costs, and any custom one-time, monthly, or yearly costs you add. Home value appreciates at the rate you choose, and equity grows through appreciation plus principal paydown.
What costs does the renting scenario include?
Monthly rent with an annual increase rate, renters insurance, utilities, and any custom costs you add. The down payment and closing costs the renter didn't spend start out invested and grow at your chosen investment return.
What investment return should I assume?
A common long-term assumption for a diversified stock portfolio is 7-10% per year before inflation (roughly 5-7% after inflation). Use a conservative estimate rather than a best-case year, and test a few values, since the rent vs buy outcome is often sensitive to this number.
Does the calculator store my data?
No. Everything is calculated in your browser and saved only on your device. There is no account, no sign-up, and nothing is uploaded. Share links encode your scenario in the URL itself.
Can I compare more than one buying or renting option?
Yes. You can add, duplicate, and toggle multiple options (two different listings, a condo vs a house, or different mortgage rates) and see them all projected on the same chart against the same budget.