Rent vs. Buy Calculator
Monthly mortgage payments are just one piece of the buying equation. Property taxes, insurance, PMI (if your down payment is under 20%), HOA fees, and closing costs all add up. This calculator compares the real out-of-pocket cost of renting vs. buying over your planned time horizon, accounting for the equity you'd build and what you'd net after selling.
Rule of thumb: buying usually beats renting around 5–7 years in most markets, but it depends on costs.
Renting
Buying
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Monthly cost breakdown
Rent
Buy
PMI added: With a 10% down payment, you'll pay approximately $2,160/year in private mortgage insurance until your loan balance drops below 80% of the home's value. Put 20% down to eliminate it.
True cost over 7 years (after selling / moving out)
Rent
$183,899
Total rent paid (with 3%/yr increases)
$0 equity returned at move-out.
Buy
$175,127
Net cost after recovering equity at sale
Equity at sale: ~$95,335 (includes ~3%/yr appreciation, minus ~6% selling costs).
At 7 years, buying is cheaper by $8,772 in this scenario.
The longer you stay, the more buying tends to win. Your monthly payment stays fixed while rent rises, and you build equity. This calculator includes ~3% closing costs on purchase and ~6% selling costs at exit.
What you can actually change
Time horizon — This is the most important variable. Buying rarely makes sense financially unless you plan to stay 5+ years. The math changes dramatically at 7–10 years.
Down payment — More down means lower monthly payment and no PMI. But a larger down payment also ties up cash that could earn returns elsewhere — there's a tradeoff.
Mortgage rate — Shop multiple lenders. A 0.5% rate difference on a $400k loan saves over $40k over 30 years. Rate is one of the few things you can negotiate.
Your next step
If buying makes sense for your timeline, get pre-approved and compare at least 3 lender rates before committing.
Pre-approval takes an hour and gives you a real number to work with — not a guess. Rate differences between lenders on the same loan can vary by 0.5–1%, which adds up to tens of thousands over the life of the loan.
Includes estimated closing costs (~3% on purchase, ~6% on sale), PMI for down payments under 20%, and compounding rent increases. Does not include maintenance costs (budget 1% of home value/year), tax deductions, or investment returns on the down payment difference. Results are illustrative. Your market conditions and specific costs will vary.
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