Rent vs. Buy
Calculate the true cost of homeownership versus renting. We factor in appreciation, taxes, maintenance, and the opportunity cost of your down payment.
Verdict after 7 years
Buying is Better
Buying Assumption
Renting Assumption
Mortgage Payment
$1,770
Principal & Interest only. Insurance and tax added to total cost.
Down Payment Opportunity
7.0%
The return you lose by not investing your down payment in stocks.
Net Cost Breakdown
?Buy vs Rent: The True Math
Deciding whether to buy a home or rent isn't just about comparing a monthly mortgage payment to a monthly rent check. Buying a home involves unrecoverable costs like property taxes, maintenance, and mortgage interest.
Renting also has unrecoverable costs, but it allows you to invest your down payment elsewhere (like the stock market). This calculator compares the Net Wealth impact of both choices over time.
Key Factors to Consider
Appreciation
Real estate historically grows at 3-5% per year. This "equity gain" is a major perk of buying.
Opportunity Cost
If you put $50k into a house, you lose the 7-10% yearly return you might get in an index fund.
Unrecoverable Costs
Rent is 100% unrecoverable. For homeowners, taxes and interest are unrecoverable.
Mobility
Buying has high entry/exit costs (6% agent fees). If you stay less than 5 years, renting is usually cheaper.
Calculated with Caution
This tool assumes a 30-year fixed-rate mortgage and applies standard estimates for home insurance (0.5%) and maintenance (1%). Local market conditions vary wildly; always consult with a local real estate professional before making major financial moves.