Rent vs Buy Calculator

Compare the true 5/10/20-year cost of renting vs buying a home.

Home & Mortgage

Home Price ($)

Down Payment (%)

Mortgage Rate (%)

Time Horizon (years)

Rent & Growth Assumptions

Monthly Rent ($)

Annual Rent Increase (%)

Home Appreciation (%/yr)

Maintenance (%/yr)

Total Cost of Buying

-$26,241

over 10 years

Monthly payment: $3,715/mo

Total Cost of Renting

$352,505

over 10 years

Incl. $77,372 opportunity cost

Buying wins at year 1After year 1, buying becomes the cheaper option.

Year-by-Year Comparison

Year	Total Buying Cost	Total Renting Cost	Difference
Year 1	$9,674	$29,600	Buy saves $19,926
Year 2	$17,052	$60,312	Buy saves $43,260
Year 3	$21,988	$92,185	Buy saves $70,197
Year 5	$23,906	$159,623	Buy saves $135,718
Year 7	$14,058	$232,362	Buy saves $218,304
Year 10	-$26,241	$352,505	Buy saves $378,746

Assumptions

Down payment alternative return: 7% per year (opportunity cost)
Annual maintenance: 1% of home value per year
Home appreciation: 4% per year
Annual rent increase: 3% per year
Mortgage rate: 7% fixed for the full term
Buying total includes down payment, mortgage payments, and maintenance, minus home equity gained
Renting total includes all rent payments plus opportunity cost on the down payment
Closing costs, HOA fees, property taxes, and home insurance are not included

About Rent vs Buy Calculator

This calculator helps you compare the true long-term financial cost of renting versus buying a home. It accounts for mortgage payments, home appreciation, maintenance costs, and the opportunity cost of your down payment — giving you a realistic picture of which option makes more financial sense over your chosen time horizon.

Built and maintained by Meet Shah · Last updated 28 July 2026

What this tool is used for

Comparing renting against buying over a chosen holding period.
Seeing how much the opportunity cost of a deposit matters.
Testing how the answer changes with a different house-price assumption.
Including maintenance and transaction costs that a mortgage payment hides.
Producing a figure to discuss rather than a decision to follow.

Frequently Asked Questions

What does the comparison actually need to include?: On the buying side: mortgage interest, property tax, insurance, maintenance at roughly 1% a year, and transaction costs on both ends. On the renting side: rent, and crucially the return on the deposit that stays invested rather than being tied up in a house.
Why do transaction costs matter so much?: Because they are large and front-loaded — commonly 2–5% to buy and 5–8% to sell. That is why a short holding period rarely favours buying: the round trip has to be recovered from appreciation before ownership breaks even at all.
What is the opportunity cost of a deposit?: What that money would have earned elsewhere. A £50,000 deposit at a 5% real return compounds substantially over ten years, and a comparison that ignores it flatters buying by exactly that amount — which is often the deciding term.
Is buying always better long term?: No — it depends on the price-to-rent ratio, local appreciation, and the return available on invested savings. Where rent is cheap relative to prices, renting and investing the difference has historically beaten buying over quite long horizons.
What does the calculation leave out?: Everything non-financial, which frequently decides it: security of tenure, freedom to alter the property, mobility for work, and the discipline effect of a mortgage as forced saving. The arithmetic narrows the question rather than answering it.

Common errors and gotchas

Comparing a mortgage payment against rent, which omits maintenance, insurance, tax and transaction costs.
Ignoring the opportunity cost of the deposit, which is often the largest single term.
Assuming house prices only rise, which the holding period may not bear out.
Omitting buying and selling costs, which need several years of ownership to amortise.
Treating the output as a decision, when mobility and security are not in the model at all.