Rent vs Buy Calculator

Renting is often better when you plan to move within 3-5 years, home prices are very high relative to rent, you have high-interest debt to pay off, or you can invest the down payment for higher returns.

Consider renting if: The price-to-rent ratio exceeds 20-25, you value flexibility, or maintenance costs would be burdensome.

Buying typically makes sense when you plan to stay 5+ years, want stability and control, can take advantage of tax benefits, and believe in long-term property appreciation.

Additional benefits: Building equity, predictable payments (fixed mortgage), and the ability to customize your living space.

Calculators provide estimates based on assumptions about appreciation, investment returns, and tax situations. Actual results may vary due to market changes, unexpected costs, or personal circumstances.

Use as guidance: Consider multiple scenarios and consult financial advisors for personalized advice based on your specific situation.

The opportunity cost includes potential investment returns on your down payment and closing costs, plus the difference between rent and total homeownership costs that could be invested elsewhere.

Example: If you can earn 7% in the stock market but your home appreciates at 3%, the opportunity cost is the 4% difference on your invested capital.

Homeowners can deduct mortgage interest and property taxes (up to limits), reducing taxable income. Higher earners in expensive markets benefit more from these deductions.

Important: Tax benefits depend on itemizing deductions and your marginal tax rate. The Tax Cuts and Jobs Act reduced benefits for many homeowners.

Consider lifestyle preferences: stability vs flexibility, maintenance responsibilities, commute changes, school districts, and emotional satisfaction of homeownership.

Remember: Financial calculations don't capture personal values like community ties, pride of ownership, or the security of having a permanent home base.