Rent vs Buy Calculator: Your Net Worth Either Way, Year by Year
Compare buying a home with renting and investing the difference, and see your net worth either way for each year, plus the year buying pulls ahead.
Enter the home, the loan, the rent and how long you expect to stay. With a $400,000 home, 20% down and a 6.5% 30-year loan against $2,200 rent, owning costs $2,872.62 the first month against $2,215.00 for renting, but buying overtakes renting in year 9 and is ahead by $11,262 after 10 years, assuming 3% yearly growth in prices and rent and a 5% return on investments. Taxes, PMI and the mortgage interest deduction are left out.
This comparison is an estimate built on the assumptions you enter, not a forecast of prices, rents or returns; it is not financial advice, and not tax or investment advice. It leaves out income taxes, tax deductions, private mortgage insurance and one-off repairs. Talk to a qualified financial professional before deciding whether to buy or rent.
After 10 years
Buying is ahead by $11,262
Buying overtakes renting in year 9.
- Mortgage payment (principal and interest)
- $2,022.62
- First month, owning (all costs)
- $2,872.62
- First month, renting
- $2,215.00
- Cash to buy (down payment and closing)
- $92,000
| Year | If you buy | If you rent | Buy minus rent |
|---|---|---|---|
| 1 | $70,857 | $104,782 | -$33,925 |
| 2 | $86,291 | $117,665 | -$31,373 |
| 3 | $102,330 | $130,638 | -$28,308 |
| 4 | $119,001 | $143,688 | -$24,688 |
| 5 | $136,332 | $156,803 | -$20,471 |
| 6 | $154,354 | $169,967 | -$15,612 |
| 7 | $173,101 | $183,163 | -$10,062 |
| 8 | $192,604 | $196,375 | -$3,771 |
| 9 | $212,901 | $209,583 | $3,318 |
| 10 | $234,029 | $222,767 | $11,262 |
Net worth if you buy: home value minus loan balance and selling costs, plus anything invested. If you rent: the down payment, closing costs and any monthly savings, invested. Before taxes, PMI and the mortgage interest deduction.
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About the Rent vs Buy Calculator
A fair comparison counts more than the mortgage against the rent. Buying ties up the down payment and closing costs, adds property tax, insurance, upkeep and HOA dues, and costs a slice of the home's value again when you sell. Renting costs only rent and renters insurance, but rent can rise every year (the default here assumes 3%), and the home you did not buy may be gaining value. This calculator follows both paths month by month. The renter keeps the down payment and closing costs invested from day one, and each month whichever side paid less invests the difference at the same return. At the end of every year it compares the buyer's equity after selling costs, plus any savings, with the renter's savings. The year the buyer pulls ahead is the break-even point, and it moves a lot with your inputs: how long you stay, how fast prices and rents grow, and what your money would earn otherwise. The mortgage payment uses the standard fixed-rate formula; the rest is this calculator's own model, and it leaves out income taxes, PMI, the mortgage interest deduction and one-off repairs.
Frequently asked questions
Is it better to rent or buy?+
It depends mostly on how long you stay. Buying front-loads costs: closing costs, then selling costs, and early payments that are mostly interest. With the default inputs here buying overtakes renting in year 9, so a move after 5 years would have favored renting. Change the years and growth rates to see where your own break-even lands.
Why does the renter invest the down payment?+
Because that money would otherwise be in the house. Leaving it out would make renting look worse than it is. The same goes for monthly savings: whichever choice costs less that month invests the difference, so both paths spend the same amount.
What does the comparison leave out?+
Income tax on investment gains, the mortgage interest and property tax deductions, private mortgage insurance on small down payments, and big one-off repairs. Each can tilt the answer, so treat the break-even year as a range rather than a date.
What numbers should I use for home value growth and returns?+
There is no right answer, which is why the calculator lets you change them. Try a cautious and an optimistic set and see whether the decision changes. If it flips, the break-even year is sensitive to those guesses.
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