How to Compare Renting and Buying Costs
By Tools Star Hub Editorial Team · Published
Add the rent you would pay over the years you choose, and add the cash a purchase would require over those same years. The comparison is those two totals from the inputs you type.
It is not a prediction of prices or a reason to buy. Rent can grow by a yearly rate you enter. The home value can change by a yearly rate you enter. Tax, insurance, HOA, and maintenance are amounts you type, or 0.
How to compare the two costs
- Enter monthly rent and a yearly growth rate. Use 0 if rent stays flat.
- Enter the price, down payment, rate, and term. The term is in years. A mortgage payment inside the comparison uses those figures.
- Enter tax, insurance, HOA, and maintenance. Leave them at 0 when you want them left out.
- Enter a yearly change in home value. Use 0 if you want the price held flat.
- Enter how many years to compare. Read total rent, cash spent buying, equity, remaining loan balance, and the net cost of buying.
Example
Full price paid up front
Rent of 1,000 with no growth, a 120,000 price, 120,000 down, and a 1-year comparison with every other rate at 0: total rent is 12,000. Buying cash is 120,000, equity is 120,000, the remaining balance is 0, and the net cost of buying is 0 because the down payment is still equity.
Rent and value both grow at 10%
Rent of 1,000, a 100,000 purchase paid in full, and a 2-year comparison: total rent is 25,200, and the home value is 121,000.
Things to watch
Other home calculators
A payment on a mortgage you already sized belongs on the Mortgage Calculator. A price estimated from income belongs on the Home Affordability Calculator.
FAQ
- What is total rent?
- Monthly rent times 12, repeated for each year, with the growth rate applied between years. Flat 1,000 rent for 1 year is 12,000. The same rent growing at 10% for 2 years is 25,200.
- What if I pay the full price up front?
- The down payment equals the price, so the loan balance is 0. The cash is still in the house as equity when the value does not change.
- Does a higher home value mean buying won?
- No. The page shows the value you asked it to project. It does not decide which choice is better.
- Are taxes and repairs included automatically?
- Only if you type them. Blank or 0 means they are left out.
To add a rent total and a buying-cost total from numbers you type, use the Rent vs Buy Calculator.