CompareMage

Home and energy

Rent vs Buy Calculator

Compare a renter who invests the avoided down payment with a buyer who builds equity, using assumptions you can edit.

Decision: Under these assumptions, is the buyer or the renter ahead after N years?

This comparison runs in your browser. CompareMage does not send the numbers you enter to our servers.

Buy path

Home

Ownership costs

Assumptions

Rent path

Alternative

Comparison result

After 7 years, the rent-and-invest path’s net position is $23,396.01 higher.

First-year buy housing cash is about $2,872.62 per month including tax, insurance, maintenance, and HOA. Rent starts at $2,220.00 per month. Break-even year: not reached in this horizon. This is not a buy or rent recommendation.

Monthly mortgage
$2,022.62
Loan amount
$320,000.00
Buyer net at horizon
$173,100.59
Renter net at horizon
$196,496.60
Year-by-year net position
YearBuyer cash that yearRenter housing cashBuyer netRenter netBuyer ahead by
1$126,723.41$26,640.00$70,856.72$106,088.42-$35,231.70
2$34,982.97$27,432.00$86,291.38$120,457.75-$34,166.37
3$35,250.32$28,247.76$102,330.18$135,107.93-$32,777.75
4$35,525.69$29,087.99$119,000.68$150,038.36-$31,037.68
5$35,809.31$29,953.43$136,331.92$165,247.90-$28,915.97
6$36,101.45$30,844.84$154,354.49$180,734.78-$26,380.30
7$36,402.35$31,762.98$173,100.59$196,496.60-$23,396.01

How to read the result

If the buyer is ahead, the model’s net home equity minus selling costs exceeded the renter’s invested cash under your assumptions. That is not a prediction that home prices will follow the appreciation rate you typed.

Calculated facts

Totals, differences, and break-even figures come only from the values on this page. They describe the math, not what you should do.

Decision factors

Fit, risk, time, quality, and personal constraints stay outside the calculator. A cheaper path can still be the wrong path for those reasons.

Methodology

The buy path uses a fixed-rate amortizing mortgage. Each year the model updates remaining balance, a grown home value, property tax, insurance, maintenance, and HOA. Buyer net position is home value minus remaining loan minus selling costs. The renter starts with the avoided down payment and closing costs invested at the return you enter, and invests any annual cash-flow gap when buying costs more. Break-even is the first year buyer net is at least renter net.

Assumptions

  • You can actually obtain the mortgage rate and down payment you entered.
  • Investment return is a constant annual rate, not a forecast of any market.
  • No itemized tax deduction, PMI schedule, or renovation shock.

Examples

Short horizon

High closing costs and selling costs often keep the renter ahead in the first few years even if the monthly rent looks similar to a mortgage payment.

How to use it

  1. Enter price, down payment, rate, ownership costs, and today’s rent.
  2. Set appreciation, rent inflation, investment return, selling costs, and years.
  3. Read first-year monthly cost, the year-by-year table, and whether a break-even year appears.

Limits

  • Local prices, HOA special assessments, and vacancy are not loaded from an index.
  • This is informational math, not mortgage, tax, or investment advice.

Questions

Is this telling me I should buy a house?

No. It is a simplified net-position comparison based on the assumptions you type. Job mobility, maintenance surprises, and local market risk can outweigh the spreadsheet.

How does the renter invest the down payment?

Year one, the renter is treated as investing the down payment plus closing costs. In later years, if buying costs more cash than renting, that gap is added to the renter’s investment and grown at the return you enter.

Are tax deductions included?

No. Mortgage-interest and property-tax deductions depend on the rest of a tax return. Leaving them out keeps the model from pretending it is a tax estimate.

Related comparisons