WealthSavvy

Rent vs Buy Calculator

Compare net wealth after a fixed holding period: rent and invest the monthly savings versus buy, pay a mortgage, sell, and pay transaction costs. Adjust every assumption below.

Disclaimer: Illustrative only. Not tax, legal, or financial advice. Does not include PMI, itemized deductions, or transaction costs beyond the fields you enter.

Buy
Rent
Shared assumptions

The renter starts with your down payment + closing costs in a taxable portfolio and adds the monthly difference between all-in owning costs and rent whenever rent is cheaper.

After 10 years

Buying wins

Rent + invest the difference: $219,801 · Buy then sell: $257,235

Gap: $37,434 in favor of buying

Interest paid (buy)

$218,247

Cash out (buy)

$395,096

Cash out (rent)

$387,186

Breakeven (crossover)

Year 6

Net if you sold / portfolio value by year

Buyer series is net cash after sale costs and mortgage payoff at each year-end.

Year-by-year

Year 1

Rent + invest: $109,205

Buy (net): $75,079

Year 2

Rent + invest: $121,151

Buy (net): $92,304

Year 3

Rent + invest: $133,008

Buy (net): $110,204

Year 4

Rent + invest: $144,742

Buy (net): $128,811

Year 5

Rent + invest: $156,314

Buy (net): $148,157

Year 6

Rent + invest: $167,685

Buy (net): $168,276

Year 7

Rent + invest: $179,423

Buy (net): $189,204

Year 8

Rent + invest: $191,983

Buy (net): $210,979

Year 9

Rent + invest: $205,422

Buy (net): $233,642

Year 10

Rent + invest: $219,801

Buy (net): $257,235

How it works

The model runs month by month for your holding period. Your mortgage uses a standard fixed amortization schedule. Property tax is applied as a fixed annual percentage of the original purchase price (not reassessed each year in this version). Maintenance scales with current home value. Rent increases once per year by your chosen percentage.

The renter starts with the same upfront cash you would have put into the deal as a buyer: down payment + buyer closing costs, invested at your assumed return. That aligns the comparison with opportunity cost of capital.

Frequently Asked Questions

What does “invest the difference” mean?
Each month we compare your all-in cost of owning (mortgage principal and interest, property taxes, insurance, HOA, and maintenance) to your total rent plus renters insurance. If owning costs more than renting, the renter deposits that surplus into a taxable investment account earning your assumed nominal return. If renting costs more, the renter does not withdraw from investments — we only add contributions when rent is cheaper than owning.
How is the buyer’s ending net worth calculated?
At the end of your holding period we assume you sell the home at its appreciated value, pay off the remaining mortgage balance, and pay selling costs (commission and fees) as a percentage of the sale price. What’s left is cash — your “buy” outcome. We do not model a separate taxable brokerage account for the buyer in this version.
Does this include the mortgage interest tax deduction or property tax deduction?
No. Tax benefits depend on your filing status, SALT caps, whether you itemize, the standard deduction, AMT, and more. Treat this calculator as a pre-tax cash-flow comparison. Adding tax logic is a possible future enhancement.
Is PMI included?
No. Private mortgage insurance for loans above 80% loan-to-value is not modeled here. If you’re comparing with less than 20% down, know that monthly ownership costs may be understated until PMI drops off.
What assumptions matter most?
Home price appreciation, investment returns on the renter’s portfolio, rent growth, mortgage rate, and how long you stay in the home. Small changes in appreciation or returns can swing the outcome over long horizons.
Is this financial advice?
No. This tool is for education and illustration only. It is not tax, legal, or investment advice. Consult a qualified professional for decisions about your situation.