Real Estate
Buy vs Rent
Compare costs over a time horizon
Runs locally in your browser
Parameters
Results
- Buy (cost − asset)
- $-22,889
- Rent (total)
- $300,000
- Value in N years
- $571,164
- Better option
- Buy
Simplified model excluding taxes, maintenance, and opportunity cost of the down payment.
How it works
Compares simplified buy-versus-rent costs over a chosen time horizon, factoring in mortgage payments, down payment, rent, and home price appreciation.
Who it's for: First-time homebuyers, renters weighing a purchase, and relocators deciding how long they need to stay before buying makes financial sense.
Models total mortgage payments plus down payment minus projected future home value for the buy scenario.
Totals rent payments over the same period for the rent scenario.
Labels the lower net-cost option as Buy or Rent — a simplified headline comparison.
Excludes property taxes, maintenance, HOA fees, and the opportunity cost of the down payment.
How to use
- Enter Home price and Down payment in dollars to determine the financed amount.
- Set Mortgage rate as the annual interest rate (e.g., 6.5% for a current 30-year fixed).
- Enter Time horizon in years — how long you expect to stay in the home.
- Set Rent/mo. to the cost of a comparable rental in the same neighborhood.
- Enter Price growth as expected annual appreciation (3% is a common long-term US average).
- Read Buy (cost − asset) for net buy-side cost after future value; Rent (total) for cumulative rent; Better option for the simplified winner.
Good to know
- The break-even horizon is often 5–7 years once taxes, insurance, and maintenance are included — this model understates buy-side costs.
- If you could earn 5%+ on the down payment elsewhere, factor that opportunity cost into your decision.
- Try a lower appreciation rate (1–2%) for a conservative buy case in slow-growth markets.
FAQ
- Does this include tax benefits of homeownership?
- No. Mortgage interest and property tax deductions may reduce the buy-side cost for itemizers, but the standard deduction limits that benefit for many filers.