Rent vs Buy Calculator: Compare the Real Cost
Compare renting and owning on the numbers: monthly cost, upfront outlay, equity and the month the two paths cross over. No verdict, just the arithmetic.
Monthly difference (owning minus renting)
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Monthly rent
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Monthly ownership
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Upfront outlay
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Equity built
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Home value at horizon
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Crossover
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Ownership includes mortgage, property tax, insurance, HOA and maintenance. Equity is the home value minus the balance still owed.
The crossover is the first month where the net cost of owning — cash paid minus equity built — falls below the cash cost of renting. It is a fact about these numbers, not a recommendation.
How this is calculated
The comparison is cash outflow and equity. It deliberately produces no verdict — the crossover month is a fact about the numbers you entered, not a recommendation.
Each month the calculator runs two ledgers side by side. The renting ledger adds your rent and renter's insurance. The owning ledger adds the mortgage payment from the standard amortization formula, property tax, insurance, HOA and the maintenance allowance, plus the down payment and closing costs on the first month.
Alongside the second ledger it tracks the home's value, grown or shrunk each month at the annual rate you entered, and the balance still owed on the loan. The difference between the two is your equity:
equity = home value − remaining loan balance
The net cost of owning is the cash you have paid, minus the equity you have built. The crossover month is the first month where that figure is lower than the rent you would have paid over the same period. Selling costs are held back and reported at the end of the horizon, because you do not pay them until you sell.
What this calculator does not do
- It does not say which option is better for you. The two paths are compared on the numbers you supply and the crossover month is reported, nothing more.
- It does not model the tax treatment of a sale, the mortgage interest deduction, or the depreciation of a property over time.
- It does not price a specific loan. The mortgage rate you enter is the rate used; the page carries no live quotes and no lender information.
- It does not forecast home prices. The annual change in value you enter is applied month by month for the whole horizon, in both directions if you enter a negative number.
Sources
Guides that go deeper
Common questions
What does the crossover month mean?
It is the first month where the net cost of owning — the cash you have paid, minus the equity you have built — is lower than the cash you would have paid in rent over the same period. Before that point renting has cost less in cash terms. After it, owning has cost less once equity is counted.
Why does the calculation include a maintenance allowance?
A home costs money to keep in repair regardless of whether a mortgage is attached to it, and that cost does not appear on any closing statement. The calculator applies it as a percentage of the purchase price each year, and the percentage is an input you set.
What happens to the home value in the calculation?
It is grown or shrunk every month at the annual rate you enter, then compared with the remaining loan balance to give the equity figure. A negative rate models a falling market; a zero rate holds the price flat.
Are selling costs included?
Selling costs are shown separately at the end of the horizon, as a percentage of the final home value. They are not deducted month by month, because you do not pay them until you sell.
What is the difference between total rent and net cost of ownership?
Total rent is simply what you pay in rent each month multiplied by the number of months. Net cost of ownership is what you pay in mortgage, tax, insurance, HOA and maintenance, plus the upfront outlay, minus the equity you have accumulated. The second figure can be negative, which means you have built more equity than you have paid out.
Does this include the tax consequences of selling a home?
No. Any gain on the sale, and any exclusion that applies to it, is outside the scope of this tool. The comparison here is a cash and equity comparison, not a tax comparison.