Rent vs. buy calculator

The decision between renting and buying is a crucial financial choice. Use this handy calculator to find out what decision is best for you.

Ian Hawkins

Page written by Ian Hawkins. Last reviewed on July 8, 2024. Next review due April 1, 2025.

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This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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You will save $ per month and $ in total.

Rent monthly cost


Rent total cost


Buy monthly cost


Buy total cost


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What is a rent vs. buy calculator?

A rent vs. buy calculator is a financial tool designed to help you evaluate the financial implications of renting versus buying a property, and assists you in making an informed decision by comparing the costs associated with renting and buying over a specified period.

What other factors should be considered?

Several factors can influence the decision between renting and buying. These factors can have a big impact on the financial outcome and should be carefully considered. 

  1. Financial stability and flexibility: Your current financial situation can greatly affect your ability to secure a mortgage. Renting offers more flexibility in case of financial changes or unexpected expenses.

  2. Location and housing market conditions: The market in the area you’re considering can significantly influence the decision. High-demand areas may have higher property prices, making renting a more practical option.

  3. Duration of stay: Consider how long you plan to stay in the area. If you anticipate moving within a few years, renting may be more cost-effective.

  4. Upfront costs and down payment: Buying a home typically requires a significant down payment, which can be a barrier for some buyers. Renting usually involves lower upfront costs.

  5. Mortgage interest rates: Interest rates impact the cost of financing a property. Higher rates can lead to higher monthly mortgage payments and may influence the affordability of buying.

  6. Opportunity cost of down payment: The down payment used for buying a property could potentially be invested elsewhere, generating returns. This is known as the opportunity cost, and it should be considered when deciding to buy.

  7. Market rent vs. mortgage payment: Compare the monthly cost of renting a similar property to the monthly cost of owning. This can provide a clear financial comparison.

  8. Inflation and economic factors: Economic conditions, including inflation rates and employment stability, can impact both the market and the overall financial landscape

Is renting always cheaper?

There’s no one-size-fits-all answer to the question “Should I rent or buy?” Some cost factors are beyond your control, like the direction of the housing market, interest rates, property tax hikes, and returns on investment. No matter what, you’ve got to think about how you want to build strong, healthy finances for the long term.

Whether renting is cheaper depends on whether renters invest what they would have spent on a down payment and any savings they gather from renting each month. Buying a home costs more upfront, but you can recoup some of that (and potentially more) when you sell. To match or beat a homebuyer’s return on investment, renters need to invest, not spend, those savings. When comparing the two options, renting can often seem more affordable, especially in the early years of a home purchase. However, . The benefits of buying a home grow when you stay put for a while. As the years go by and your home’s value and equity build, less of each mortgage payment goes toward interest, and more goes toward your principal.

Other factors to consider:

While not as crucial as the four variables above, borrowers should consider the impact of additional factors to get the most accurate results. For homebuyers, these costs usually include:

  • Property taxes
  • Homeowners’ insurance
  • Maintenance
  • Repairs
  • Condo or HOA fees
  • Buying and selling costs

Renting generally involves fewer extra costs. Besides rent itself, expenses to keep in mind include:

  • Application fee or upfront cost
  • Security deposit
  • Renters insurance
  • Rent increases
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