Rent vs Buy Calculator
"Renting is throwing money away" is the most misleading line in personal finance. Owners throw money away too - interest, tax, insurance, repairs, and the cost of buying and selling. This counts both piles, and what a renter could earn on the deposit.
Cheaper over these years
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- Buying really costs
- $0
- Renting really costs
- $0
- What the house would be worth
- $0
- Equity you would walk away with
- $0
- What the renter's pot grows to
- $0
What each one really costs
The taller bar costs more over the whole period. Cheaper is not automatically right, but choosing the dearer one should be deliberate.
Move it and watch
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at {v} for house price
And what you can change
Why your own figure may differ
Where the money goes on each side
The top block is money an owner never gets back. It is the fair comparison against rent - not the mortgage payment, which partly buys the house.
| Money you never get back | Amount |
|---|
Buying really costs everything paid out, plus selling costs, minus the equity you walk away with. Renting really costs the rent paid, minus whatever the invested deposit grew by. Both are then whole-life figures over the years you stay.
How long you stay changes it
Buying and selling are paid once, so the longer you stay the further they spread. But a renter's invested deposit compounds the whole time too, which is why this is not a simple race.
| If you stay | Buying costs | Renting costs | Cheaper |
|---|
Renting vs buying: real examples
Three cases where the answer flips. Click any card to load it.
- Moving on soon
A $400,000 house, three years
Buying and selling costs paid over a short stay.
Renting wins comfortably. The costs of buying and selling have almost no time to be spread out.
Load this scenario in the calculator → - Rent rising fast
Rent climbing 6% a year
The same house, but rent that does not stay still.
Renting still wins here - but by $7,016 instead of $82,079. A mortgage payment is fixed and rent is not, and that gap compounds hard.
Load this scenario in the calculator → - The deposit doing nothing
Money that would be spent, not invested
The same buyer, but the deposit earns nothing as a renter.
Buying looks far better. Whether the renter actually invests the deposit changes the answer more than almost anything else.
Load this scenario in the calculator →
Common questions about renting vs buying
Is renting really throwing money away?
No, and the phrase does more harm than almost any other in personal finance. An owner throws money away too - mortgage interest, property tax, insurance, maintenance, and the cost of buying and selling. None of that builds equity either. The honest question is which pile of money you never get back is smaller.
Why does the tool ask what I would invest at?
Because a renter is not just someone who does not own. They have the deposit still in their pocket. If that money is invested rather than spent, it grows, and ignoring that makes buying look better than it is. Set it to zero if you would genuinely spend it.
What makes buying win?
Staying put a long time, rent that rises quickly, a house that grows in value, and low buying and selling costs. Time matters most because the cost of buying and selling is paid once and gets spread over however long you stay.
What makes renting win?
Moving soon, high buying and selling costs, a flat housing market, and being able to invest the deposit somewhere that grows faster than the house does. Renting also carries no repair bills, which is a real cost people forget to count.
Why is the answer sometimes surprising?
Because the two things people compare - rent against the mortgage payment - are the least important part. What actually decides it is how long you stay, what the deposit could have earned elsewhere, and the costs of buying and selling that only appear at each end.
What is this leaving out?
Anything that is not money. Security of tenure, the freedom to paint a wall, the freedom to leave in a month. Those matter and no calculator can weigh them for you. Use this for the money, then decide with the rest of it in view.