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Rent vs Buy Calculator

Compare the true financial impact of renting vs buying over time. Factor in mortgage rates, appreciation, maintenance, taxes, and what renting lets you invest instead.

Renting Scenario

$
3%
0%8%
7%
0%15%

Buying Scenario

$
$50,000$2,000,000
20% ($80,000)
0% ($0)50% ($200,000)
6.5%
1%12%
1.2%
0%4%
$
1%
0%3%
3.5%
0%10%
$
3% ($12,000)
0% ($0)6% ($24,000)
6%
0%10%
10 yrs
1 yrs30 yrs

Recommendation

Renting

Renting is better by $68,606 over 10 years

Monthly Rent (Yr 1)

$2,000

Monthly Own (Yr 1)

$2,956

Total Rent Cost

$275,133

Over 10 years

Total Own Cost

$383,110

Over 10 years

Renter Investments

$327,707

Portfolio value

Home Equity

$259,102

Net of 6% selling costs

Renter Net Worth

$327,707

After 10 years

Owner Net Worth

$259,102

After 10 years

Net Worth After 10 Years

Rent+$68,606
Renter Net Worth
Owner Net Worth

Recommended Annual Income

$112,415 or more

To afford this home's $2,623/mo mortgage, tax, insurance and PMI (Year 1, before maintenance), you need at least this annual pre-tax income based on the 28% guideline.

That's $9,368/mo gross income

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Understanding the Rent vs Buy Decision

It's not just about the monthly payment

The rent vs buy decision involves far more than comparing monthly rent to a mortgage payment. Buying includes property taxes, insurance, maintenance, and opportunity cost of your down payment. Renting lets you invest that same money in the market, which historically returns 7 - 10% annually.

The breakeven point matters

Most financial advisors suggest buying only makes sense if you plan to stay at least 5 - 7 years. Closing costs, selling fees, and the early years of a mortgage (when payments are mostly interest) mean you need time for appreciation to outweigh transaction costs.

Don't forget the 1% rule for maintenance

A common estimate is that annual home maintenance costs about 1% of the home's value per year. On a $400,000 home, that's $4,000/year or $333/month - a cost renters never see. This calculator factors that in for an honest comparison.

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