HOME BUYING · ON YOUR DEVICE
Rent vs. buy calculator
Model mortgage, upkeep, price growth, rising rent and investment returns. See who comes out ahead and when buying breaks even.
EXAMPLE ESTIMATE
Your estimate
Enter your values and select Calculate.
Estimates use your assumptions. Calculations use unrounded values; displayed figures are rounded.
HOW IT WORKS
A useful estimate starts with clear inputs.
- Step 1
Enter the home price, deposit, mortgage terms and yearly costs of owning.
- Step 2
Enter your current rent, how fast it may rise and the return you could earn by investing instead.
- Step 3
Calculate to see who is ahead after your chosen years, and the year buying starts to pay off, if it does.
If owning and renting cost about the same each month and your investments grow, renting can win over a short stay because buying has closing and selling costs to recover.
Calculation assumptions and limits
The renter invests the deposit and closing costs on day one, then invests (or draws down) the monthly difference between owning and renting. The buyer’s result is the home’s sale value after selling costs minus the remaining loan. Property tax and upkeep follow the home’s value. Tax benefits, mortgage insurance, moving costs, rate changes and taxes on investment gains are excluded. Small changes in growth assumptions can flip the answer, so test several.
Can I use this with my local currency?
Yes. All inputs in one calculation must use the same currency. The currency selector changes number formatting and labels; it does not look up exchange rates or convert your amounts. Local loan rules and products may calculate costs differently.
Are my numbers saved?
No. Your inputs and results stay in this page’s memory. Reloading or leaving clears them. Download the CSV or print the result if you want a copy.
Learn more: CFPB: owning a home. WORDMIO calculates locally using the assumptions above.
Compare owning with renting over your real time horizon
Buying is not automatically better than renting, and renting is not automatically wasted money. The answer depends on how long you stay, how fast prices and rents rise, what you earn on invested money and the costs of buying and selling.
This calculator builds both paths month by month. The buyer pays the mortgage, property tax, upkeep and insurance and ends with the home’s value after selling costs minus the loan. The renter invests the deposit and closing costs, then invests or draws down the monthly difference. You see who is ahead at the end and the point where buying starts to win, if it does.
Free to use. No sign-up required.
How to use this tool
- Enter the home price, down payment, mortgage terms and yearly costs of owning.
- Enter today’s rent, expected rent increases and the return you could earn by investing.
- Choose how many years you will stay and calculate.
A practical example
If owning and renting cost about the same each month, renting can win a short stay because buying has closing and selling costs.
Before you finish
Test several growth and return assumptions. The winner can change with small differences.
What the calculator compares
Both paths start with the same money. The buyer spends the deposit and closing costs and then pays the mortgage, property tax, upkeep and insurance each month. The renter pays rent and invests the deposit and closing costs, plus any monthly saving compared with owning. At the end, the buyer’s result is the home’s value after selling costs minus the remaining loan, and the renter’s result is the invested portfolio.
The costs people forget
Buying costs more than the mortgage. Property tax, upkeep, insurance, closing costs when you buy and agent and legal fees when you sell all reduce the result. That is why short stays often favor renting. Upkeep of about 1% of the home’s value per year is a common starting point.
Assumptions that matter most
The home price growth and the return on invested money have the biggest effect, followed by how fast rent rises. Test an optimistic and a cautious case for each. If the same side wins in both, the decision is more robust. If the winner flips, your decision should depend on non-financial factors such as stability and flexibility.
Beyond the numbers
Owning gives control over your home and protection against rent increases. Renting gives flexibility and fewer surprise costs. Neither is captured fully by a calculator. Use this result with the mortgage affordability calculator to check that a purchase would also fit your budget.
Frequently asked questions
How long do I need to stay for buying to pay off?
It depends on your numbers. Closing and selling costs are paid once, so they weigh more on short stays. The calculator shows the month buying pulls ahead, or says if it does not within your chosen years.
Why does the renter invest money?
The money that would have gone into the deposit and extra ownership costs could be invested. Ignoring that would favor buying unfairly. You can set the return to 0% to test a cautious view.
Are tax benefits included?
No. Mortgage interest deductions, capital gains rules and other tax effects vary by country and person, so they are excluded.
Why do small changes flip the result?
Long-run growth rates compound. A one percentage point difference in price growth or investment return can change the winner, so test several scenarios.
Does it include maintenance?
Yes. Upkeep is a percentage of the home’s value each year. About 1% is a common rule of thumb, but older homes can cost more.
Why does the renter’s portfolio change when rent rises?
Because the monthly amount the renter invests is the difference between owning and renting. If rent rises toward the cost of owning, there is less to invest.