Rent vs. Buy Calculator
Should you rent or buy? Compare the true long-term cost of each option.
Disclaimer: This calculator is for general educational and informational purposes only. It does not constitute financial advice, investment advice, tax advice, or legal advice and is not a substitute for consultation with a qualified professional. No fiduciary or advisory relationship is created by your use of this tool. Results are estimates based on the inputs you provide, standard mathematical formulas, and publicly available data that may not be current and may not reflect your individual financial situation, applicable tax laws, or other relevant factors. Neither MayoCalc nor Cook Media Systems assumes any liability for losses, damages, or other consequences arising from the use of any information or results provided by this tool. Always consult a qualified financial advisor, certified public accountant, or attorney before making financial decisions. See our full
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How This Calculator Works
This calculator compares the total cost of renting versus buying a home over a specified time period. It accounts for mortgage payments, property taxes, insurance, maintenance, PMI, home appreciation, tax benefits of homeownership, investment returns on money not spent on a down payment, rent increases, and closing costs. The output shows which option leaves you with more wealth after the specified period.
Key Factors in the Decision
Time horizon: The longer you plan to stay, the more buying favors you. Most analyses show buying becomes cheaper than renting after 5-7 years, depending on local market conditions. Price-to-rent ratio: If annual rent is less than about 5% of the purchase price, renting is usually better. If more than 5%, buying usually wins. Down payment opportunity cost: A $60,000 down payment invested at 7% for 5 years would grow to $84,000. Buying means that money is in home equity instead, which may grow faster or slower depending on the market. Read our full analysis in the Rent vs. Buy guide.
Rent vs. Buy FAQ
Is renting always throwing money away?
No. Renting pays for a place to live, just as buying does. The "throwing money away" argument ignores the costs of ownership: mortgage interest, property taxes, maintenance, insurance, and closing costs. In expensive markets where price-to-rent ratios are high, renting and investing the difference can build more wealth than buying.
When should I definitely rent?
If you might move within 2-3 years, if you do not have a stable income, if you cannot afford 5-10% down without draining savings, or if you are in a market where buying is dramatically more expensive than renting. Buying has significant transaction costs (5-8% of the home price) that you cannot recover with a quick sale.