Should you rent or buy a home? Compare the total costs of renting versus buying over your expected time horizon, including mortgage payments, taxes, maintenance, and equity.
Annual rate as % of home value
Total Cost of Renting
$166,909
Total Cost of Buying
$324,491
Home Equity Built
$177,290
Net Cost of Buying
$147,200
Monthly Mortgage (P&I)
$1,770
Buying becomes cheaper than renting after ~6 years.
Compare building home equity against investing your down payment in the stock market over 7 years.
Home Equity Built
$177,290
+$107,290 gain
Your $70,000 down payment grows through mortgage payments and 3.0% annual appreciation.
Stock Market Alternative
$129,265
+$48,765 gain
If you invested $80,500 (down payment + closing costs) in the stock market at ~7% annual return.
Note: Home equity includes leverage benefits. Stock market returns are historical averages and not guaranteed. This is a simplified comparison.
This calculator compares the total cost of renting to the net cost of buying over your chosen time frame. The buying cost includes your mortgage, taxes, insurance, maintenance, and closing costs — but subtracts the equity you build through appreciation and principal payments. The rental cost includes your monthly rent plus annual increases and renters insurance. The result shows which option leaves you in a better financial position.
Most financial experts suggest buying makes sense if you plan to stay at least 5-7 years. This gives you time to offset the upfront costs of buying — closing costs, moving expenses, and the interest-heavy early years of a mortgage. The shorter your stay, the more likely renting is the better financial choice.
The calculator includes your down payment, monthly mortgage payments (principal and interest), property taxes, homeowners insurance, maintenance costs (typically 1% of home value per year), estimated closing costs when buying (3%), and selling costs (6% agent commission). It also accounts for home appreciation and the equity you build over time.
This calculator shows costs before tax deductions. Homeowners can deduct mortgage interest and property taxes if they itemize, but with the standard deduction at $14,600 for single filers, many homeowners no longer benefit from itemizing. Consult a tax professional for your specific situation.
When you put money toward a down payment, you lose the potential returns from investing that money elsewhere. A general rule of thumb is that the stock market averages 7-10% annually. This calculator focuses on direct housing costs but keep opportunity cost in mind when making your decision.
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