Rent vs. Buy Calculator — Which Makes More Financial Sense for You?
Renting vs. buying is one of the most important financial decisions you will make — and the right answer is different for everyone. It depends on how long you plan to stay, what homes cost in your market, what rent costs, how much home prices are appreciating, and what you could do with the money you would otherwise put toward a down payment.
Our free Rent vs. Buy Calculator runs all of these factors simultaneously and tells you exactly which option makes more financial sense for your specific situation.
Rent vs. Buy Calculator
Enter your numbers below to see which option makes more financial sense for you
Buying Scenario
Renting Scenario
Assumptions: 30-year fixed mortgage · Homeowners insurance 0.5% of value annually · Maintenance 1% of value annually · Closing costs 3% on purchase · 6% selling costs on exit
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Get Your Free Pre-ApprovalWhat the Calculator Factors In
Most rent vs. buy calculators only compare the mortgage payment to rent. That gives you a misleading answer. Our calculator accounts for the full financial picture on both sides:
True Cost of Buying
- Principal and interest payment
- Property taxes (by state)
- Homeowners insurance
- HOA / CDD fees
- Maintenance reserve (1% annually)
- Closing costs on purchase (3%)
- Selling costs on exit (6%)
- Minus: home appreciation gained
- Minus: equity built via principal paydown
True Cost of Renting
- Monthly rent payments
- Annual rent increases
- Renters insurance
- Opportunity cost of down payment
- What that money could earn invested
The Most Important Variable — How Long You Stay
Time horizon is the single biggest factor in the rent vs. buy calculation. Buying almost always wins over 7-10+ years because appreciation compounds, your mortgage payment stays fixed while rent rises, and you build substantial equity. Renting often wins in the short term (1-3 years) because buying costs — closing costs, transaction costs, early-year interest — take time to recoup.
When Renting Makes More Sense
- You plan to move within 2-3 years
- Your job or income is uncertain
- You have not yet saved enough for a comfortable down payment and emergency reserve
- You are new to an area and still figuring out which neighborhood fits your life
When Buying Makes More Sense
- You plan to stay for 5+ years
- Your income and employment are stable
- You have a down payment plus reserves after closing
- Rents in your market are rising faster than mortgage payments
- You want to build equity and long-term wealth
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No — and anyone who tells you otherwise is not giving you honest advice. Buying wins financially over the long term in most markets, but renting is the smarter choice if you are moving within a few years, your finances are not yet ready, or the specific numbers in your market favor renting. Run the calculator with your real numbers and let the math guide the decision.
What appreciation rate should I use?
The long-term national average for home appreciation is approximately 3-4% annually. Use 3-4% for a conservative estimate. We suggest running the calculator at both 2% and 5% to see the range of outcomes.
Ready to Run Your Real Numbers?
The calculator gives you a financial framework — we give you the actual rate, payment, and pre-approval. Talk to Kirk or Ken. Wholesale rates, zero junk fees, same-day pre-approvals.
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