Rent vs. Buy Calculator
Long-run cost of owning vs. renting & investing the difference
| Year | Buy: cash out | Buy: net cost | Rent: cash out | Rent: net cost | Gap |
|---|
| Year | Principal | Interest | PMI | Balance | Home value | Equity |
|---|
PMI stops once your loan balance falls to 80% of the original purchase price.
| Scenario | Price | Down | Rate | Horizon | Buy net | Rent net | Cheaper | |
|---|---|---|---|---|---|---|---|---|
| No scenarios saved yet — adjust the numbers above, then save to compare. | ||||||||
Scenarios are kept for this browser session only.
Buy net cost = down payment + closing costs + every mortgage payment, property tax, insurance, PMI, maintenance and HOA charge through the horizon, minus what you'd net from selling (home value after appreciation, less selling costs and remaining balance).
Rent net cost = every rent and renter's-insurance payment, minus the future value of your down payment and closing costs invested instead, minus the future value of investing any month renting is cheaper than buying.
PMI is added whenever your down payment is under 20%, estimated on the original loan amount, and drops off once your balance reaches 80% of the original price.
Whichever net cost is lower at your horizon is the cheaper path — that's the "At your horizon" card and the chart's crossover point. Toggle "today's dollars" to discount future years to present-day purchasing power.
Tips for a more accurate estimate
Use market rent, not your rent
Compare against what a similar home rents for today — not a below-market rate you happen to have, since that could end at your next lease.
PMI usually isn't permanent
It drops automatically once your equity reaches 20-22% of the original price, so it shouldn't be treated as a lifetime cost.
Appreciation is a guess, not a promise
Long-run home price growth has tracked roughly 3-4% before inflation in many markets, but local markets vary and can go negative for stretches.
Selling costs add up fast
Agent commissions and closing costs at exit often run 6-8% of sale price — a big swing factor if you might sell within a few years.
Frequently asked questions
What does "breakeven year" mean?
The first year buying's net cost drops below renting's (or vice versa). Sell before it and renting looked cheaper; stay past it and buying did.
Why credit renting with investment returns?
Renting skips the down payment and closing costs. Invested instead, that money would grow — this calculator credits renting with that growth.
When does PMI apply?
Whenever your down payment is below 20%. It's removed once your balance reaches 80% of the original price, matching how it typically works with lenders.
Does this include the mortgage interest deduction?
Only if you enable it under Advanced assumptions — many homeowners now take the standard deduction instead of itemizing.
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Disclaimer
This calculator is provided for general informational and educational purposes only and does not constitute financial or legal advice. All figures are approximations based on the numbers and assumptions you enter — they do not account for lender-specific terms, local tax rules, transaction timing, or market conditions.
FinToku is not a lender, broker, or real estate advisor. Consult a licensed financial advisor, tax professional, or real estate agent before making a buy-or-rent decision.
Free tool by FinToku · Results are indicative estimates only.