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  • Rent vs Buy Calculator: Net Worth, Mortgage & Investment Tradeoff

    • Rent vs Buy Calculator

    Net Worth, Mortgage & Investment Tradeoff

    Inputs

    Purchase Setup

    $

    Loan Amount

    $360,000

    Down Payment: 20.0%

    $

    Equivalent: 20.0%

    %
    years

    Rent Setup

    $
    $/ mo
    years
    %

    Ownership Costs

    %
    $
    $/ mo
    %
    %
    %

    Market Assumptions

    %
    %
    %
    %

    Results

    Net Worth Advantage

    $75,570

    Renting wins · over 10 years

    Decision Summary

    Buy

    $263,283

    Net Sale Proceeds: $263,283

    Rent

    $338,853

    Renting wins

    Renter Investment Value: $338,853

    Cash Needed to Buy

    $103,500

    Monthly P&I: $2,275

    Initial Monthly Gap

    +$1,272

    Renting starts cheaper

    Break-even Year

    Not reached

    First year buying net worth catches renting

    Final Net Worth Comparison

    $263,283
    $338,853
    Buy
    Rent

    Net Worth Timeline

    Net Worth Timeline: Buy: $263,283, Rent: $338,853$0$84,713$169,426$254,140$338,8530246810
    • Buy
    • Rent

    Decision Summary

    Buy Net Worth
    $263,283
    Rent Net Worth
    $338,853
    Net Worth Advantage
    $75,570
    Final Home Value
    $604,762
    Net Sale Proceeds
    $263,283

    Buying Breakdown

    Total Buy Cash Outflow
    $581,206
    Total Interest
    $218,247
    Total Property Tax
    $62,906
    Total Maintenance
    $52,422
    Total PMI
    $0
    Selling Costs
    $36,286

    Renting & Investing

    Total Rent Cash Outflow
    $310,969
    Total Rent
    $306,786
    Total Renter Insurance
    $4,183
    Renter Investment Value
    $338,853
    Buyer Surplus Investment
    $0
    Housing Decision

    Compare lifestyle flexibility against long-term equity creation

    Rent vs buy decisions hinge on transaction costs, time horizon, mortgage terms, rent growth, property appreciation and the return you could earn by investing cash instead. Use this model as a planning lens, then validate local costs with lenders, agents and resources like CFPB and Fannie Mae.

    Start with horizon

    Short holding periods often punish buying because closing and selling costs have little time to amortize.

    Model cash alternatives

    A renter can invest upfront cash and monthly savings, while a buyer builds principal and home equity.

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    Stress-test costs

    Change appreciation, rent inflation, maintenance and investment return before trusting a single verdict.

    The better option is not always the cheaper monthly payment; it is the path that leaves you with more net worth after realistic holding costs.

    Frequently Asked Questions

    • It compares final net worth, not only monthly payment. Buying includes equity after selling the home, mortgage balance, closing costs, selling costs and any buyer-side invested surplus. Renting includes invested upfront cash and monthly savings. Fannie Mae highlights the same core tradeoffs: flexibility, maintenance, equity and total housing costs.
    • A renter can invest the cash that would have gone into down payment and closing costs. The calculator also invests monthly savings for whichever option is cheaper that month, so the comparison is more balanced.
    • The model includes principal, interest, property tax, homeowners insurance, HOA, maintenance, PMI, buyer closing costs and seller transaction costs. CFPB notes that mortgage and homebuying costs can be paid upfront or over time.
    • Down payment changes loan size, monthly principal and interest, PMI exposure and the cash the renter could invest instead. CFPB also explains that closing costs are separate from the down payment.

    Guides

    How-to guides that use this tool

    All 1 guide
    HousingWhat Salary Do You Need to Buy a Home? Six Countries Compared9 min read
    Home
    Real Estate Mogul