What is calculated
Compare modeled buyer and renter net assets at the selected exit month, including upfront cash, recurring costs, mortgage equity, sale costs and invested cash differences.
Rent vs Buy Calculator
Enter your plan and calculate to see the result and its assumptions.
Method
Both paths begin with the same resources and monthly contribution. The model amortizes the mortgage, updates entered housing costs and growth, invests unused cash, then values both paths at exit.
Important boundary
This is a conditional scenario comparison, not an affordability decision or recommendation. Local taxes, tax benefits, repairs and future market returns are included only when explicitly entered.
Interpretation
A positive buyer-minus-renter difference favors the buying path under the entered assumptions; a negative value favors the renting path.
A crossover month is conditional and can reverse later, so compare more than one realistic holding period and cost scenario.
The comparison includes the opportunity cost of upfront cash and monthly cash-flow differences; it is not rent versus mortgage payment alone.
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Method and test recordFormula v1.0.0
- Recorded scope
- Not recorded
- Publisher
- CalculatorGeek
- Recorded review date
- Not recorded
- Next source review
- Not scheduled
- Definition fixtures
- 1 configured scenarios
- Published examples
- 1 shown below
Recorded method
No tool-specific review method has been recorded.
These records describe the published model and reference tests. A test-case count is not a certification of every possible input or an independent specialist review. Editorial policy
Known limitations
- This is a scenario comparison, not a recommendation to purchase or rent a home.
- Taxes, tax benefits, repairs, rental restrictions, and future returns are not forecast automatically.
- Currency changes display only; it does not select local mortgage or tax rules.
Method sources
Reference inputs and expected results
Up to 12 examples from the configured definition fixtures are shown. Expected values use the stated output units; invalid inputs are intended to be rejected.
| Case | Inputs | Expected result |
|---|---|---|
| Equal-resource zero-rate R01 | Worked scenario: worked | Modeled buyer-minus-renter net assets: 12000 USD |
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On this page
What the comparison actually measures
This calculator compares two paths given the same starting resources and the same available monthly contribution. Buying uses down payment, closing costs and any named one-time costs upfront. Renting uses the refundable deposit and one-time fees. Any starting cash not spent is invested in the respective scenario. Each month, the path with the lower total cash outflow invests the difference. Contributions are made at month end, so they begin earning the assumed return in the following month.
The mortgage payment uses the entered annual nominal note rate divided by 12 and the remaining principal falls as interest and principal are paid. At the planned exit, buyer net assets are home value minus loan balance and estimated sale costs, plus investments. Renter net assets are investments plus the recoverable security deposit. The displayed difference is buyer minus renter, not a loan approval or a guaranteed saving.
Worked example and crossover
With a 120,000 home, 20,000 down, a zero-rate 100-month mortgage, 1,000 monthly rent and no other costs or growth, the modeled payment is 1,000. After 12 months the loan balance is 88,000, buyer exit assets are 32,000 and renter assets are 20,000, a 12,000 buyer-minus-renter difference. Add 6,000 cash closing costs and a 10% sale charge: at month 12 buyer assets are 20,000 versus renter assets of 26,000. The same assumptions first tie at month 18. A crossing is conditional on the full scenario and may reverse later; no crossing within your selected horizon is not a prediction of the distant future.
Timing, units and omissions
Mortgage interest accrues on the opening monthly loan balance; the capped payment posts at month end. Home value and invested balances use monthly rates converted from entered annual effective growth or return. Starting rent and fixed recurring costs change on the 12-month anniversary, so month 13 reflects the first annual step. Percentage-of-value costs use that month's opening home value and do not receive an additional fixed-cost growth factor. PMI stops after the last month you explicitly enter; the tool does not infer legal cancellation.
Closing costs are cash in this version. Financed fees, refinancing, adjustable rates, extra mortgage payments, balloon loans, investment taxes, mortgage deductions, transfer taxes, capital-gains tax and unplanned maintenance shocks are outside the model. Use local quotes and test several holding periods and return assumptions. A negative sale result remains visible rather than being forced to zero.
Check the housing costs behind the comparison
The outcome depends on the costs you enter, including taxes, insurance, maintenance, fees, rent changes, closing costs and selling costs. Missing a recurring cost can change the crossover point. Use the housing costs guide beside this model to decide which expense belongs in each path; it does not supply a default local rate.
Questions to ask before relying on a scenario
Is rent compared only with the mortgage payment?
No. Both paths include entered upfront and recurring costs, and the cheaper path invests the monthly cash difference.
Does choosing a currency apply local tax rules?
No. Currency labels the amounts; it does not create a jurisdiction-specific tax or mortgage model.
Can I use the result as my house budget?
No. Use the House Affordability Calculator for the purchase-budget question.