Why does how long I stay make such a big difference?

Buying a home has large upfront costs — down payment, closing costs, and early mortgage payments that are mostly interest. These only become worth it once you've stayed long enough to build meaningful equity and for appreciation to outweigh those initial outlays. In most markets, staying fewer than 3–5 years makes renting cheaper; staying 7+ years usually favours buying. This calculator shows you where that crossover sits for your specific numbers.

What does the 'annual ownership costs' percentage cover?

It's a proxy for property tax, home insurance, and maintenance — costs you pay as an owner that renters don't. A commonly used estimate is 1–3% of the home value per year. Property tax alone varies enormously by location (from 0.3% to over 2%). Set this to match your local rate plus insurance and a realistic maintenance allowance (budget at least 1% of home value per year for upkeep).

Rent vs Buy Calculator

Enter your rent, home price, mortgage details, and how long you plan to stay to see which option costs less — with equity and appreciation included on the buying side.

How to compare renting and buying

Buying feels like building wealth; renting feels like ‘throwing money away.’ Neither framing is accurate. Buying has real costs — interest, tax, insurance, maintenance — while renting keeps capital free to invest elsewhere. The right answer depends on your numbers and how long you stay.

Worked example. Renting at $1,500/month for 5 years costs $90,000 in total rent. Buying a $300,000 home with a $60,000 down payment at 5% over 30 years, assuming 3% annual appreciation and 2% annual ownership costs, often comes out cheaper over that period once equity and appreciation are accounted for — but the result swings hard on how long you stay and on local appreciation. Plug in your own numbers to find the crossover.

The model

Rent cost: monthly rent × 12 × years staying
Mortgage payment: standard amortising formula on (home price − down payment)
Ownership costs: home price × annual costs % × years staying (tax + maintenance + insurance proxy)
Equity at exit: estimated home value at end − remaining mortgage balance
Net buy cost: down payment + total mortgage payments + ownership costs − equity

The difference between net buy cost and total rent cost tells you which is cheaper.

This is an estimate — the assumptions matter enormously

The model is deliberately simplified. It does not include closing costs (typically 2–5% of purchase price), agent fees on sale (typically 5–6%), or the opportunity cost of the down payment invested elsewhere. It uses a fixed appreciation rate applied uniformly each year. Real appreciation is lumpy and local. Change the appreciation and ownership cost inputs to stress-test the result — those two numbers move the answer more than almost anything else. Treat the output as a directional guide, not a forecast.

Variables most worth checking locally

Annual appreciation: historical averages vary from under 1% to over 6% depending on city. Look up your metro area’s 10-year average.
Annual ownership costs: find your local property tax rate and add 1% for maintenance and insurance.
Closing costs on purchase: not in this model — add them manually to the home price input to approximate their impact.