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Rent vs Buy Calculator - Real Estate Investment Analysis

Compare the long-term costs of renting versus buying a home. Factor in appreciation, maintenance, taxes, and opportunity costs to make the best housing decision.

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Rent vs Buy Calculator: Making the Smarter Housing Choice

Is it better to rent and invest the difference, or buy a home and build equity? The answer depends on your local market, how long you plan to stay, and the current interest rate environment. This Rent vs Buy Calculator performs a side-by-side financial comparison, helping you look past the emotional aspects of homeownership and focus on the math.

1. The Hidden Costs of Both Options

Buying is More Than Just a Mortgage

When you own, you are responsible for:

  • Maintenance: Typically 1% of the home's value per year.
  • Property Taxes and Insurance: Ongoing costs that usually rise over time.
  • Closing Costs: Upfront fees that can take years to recover. Use our Mortgage Calculator to estimate these.

Renting is Not "Throwing Money Away"

While you don't build equity, renting provides:

  • Flexibility: The ability to move without selling a property.
  • Cap on Costs: Your rent is the maximum you pay for housing each month, whereas a mortgage is the minimum.

2. The Opportunity Cost of the Down Payment

The single biggest factor in the Rent vs. Buy debate is what you could have done with your down payment cash. If you invested $50,000 in the stock market instead of a home, how would those returns compare to the home's appreciation? Use our Investment Calculator to explore these alternatives.

3. Using Affordability to Guide You

Before deciding to buy, ensure you are within your House Affordability limits. Buying a home you can barely afford often tilts the math in favor of renting.

4. FAQ

Q: How long should I stay in a home to make buying worth it? A: Usually, the "Break-Even" point is between 5 and 7 years. If you plan to move sooner, renting is almost always the better financial choice.

Q: Does inflation favor buyers or renters? A: Buyers. A fixed-rate mortgage stays the same while inflation devalues the currency, whereas rents typically rise alongside inflation.

Conclusion

The "Right" answer is unique to your financial situation. Use this calculator to test different timelines and appreciation rates to see which path leads to greater wealth for you.